THE Baillie Gifford Japan Trust outperformed its benchmark index significantly in its latest year.
Among the companies in the Edinburgh-based investment trust’s portfolio that enabled this strong showing were Temp Holdings and Outsourcing. The trust said that both of these employment services companies had been helped by “the labour shortage in Japan and the increase in women in the workforce”.
Baillie Gifford Japan also reaped rewards from its holdings in Cookpad, a recipe website which the trust noted had continued to gather paying members and new recipes and was moving into advertising to its substantial subscriber base.
Among other companies that benefited the trust were Sysmex and Shimadzu, both manufacturers of medical equipment, and Don Quijote, a discount retailer which the trust noted was benefiting from inbound tourism.
The investment trust, which is managed by Edinburgh-based fund management partnership Baillie Gifford, added that Toyo Tire and Rubber continued to do well in selling truck tyres in the US.
Baillie Gifford Japan achieved a 20.4 per cent rise in net asset value per share during the year to August 31.
The return on its benchmark, the TOPIX in sterling terms, was 13.4 per cent.
Nick Bannerman, chairman of the investment trust, flagged the board’s enthusiasm about investment opportunities in Japan and evidence of improvements in corporate governance across the country.
He said: “The year…saw renewed strength in Japanese equities, and our managers are continuing to find extremely interesting companies in which to invest.
“We also saw much evidence of the encouraging improvements in corporate governance across Japan, which the manager continues to press for with all our holdings.”
Contemplating the outlook, Mr Bannerman added: “There has been significant volatility across world markets since our August year-end, with Japan no exception. However, we continue to believe there are significant opportunities for investment growth amongst the companies in our portfolio, and that the managers' approach of investing for medium to long-term growth can capitalise on these opportunities going forward.”
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