Japan Trust - A history of the Trust

The Japan Trust, launched in 1981, is the longest established existing Japanese investment trust, having survived the ebb and flow of corporate activity in the Japanese sector. The first specialist Japanese investment trust was launched in the early 1970s, as Japan, undergoing rapid economic expansion, eased its restrictions on foreigners owning shares. Several other trusts were launched over the next few years and by the time the Company was listed in December 1981 there were five Japanese investment trusts in existence.

The Japanese investment trust sector is now regarded as being divided into two: general Japan and small company Japan. The Company, despite its specialisation in medium and small sized companies, is categorised as a general trust given that it is not a pure small capital specialist. The managers do have permission to buy large companies where either there are no small ones in the sector, or where the investment opportunity seems especially attractive.

The timing of the Company's launch coincided with a downturn in the Japanese market, and as at 31 August 1982 the net asset value of the Company had fallen to 85.2p per share. The next six years witnessed dramatic growth; as Japan boomed, the net asset value reached a high of 783.6p per share in December 1989. Then followed a protracted period of weakness as the asset price bubble burst and Japan endured a decade of low growth. However, the Asian crisis in 1998 prompted significant efforts by corporate Japan to restructure, and many companies are now enjoying much better profitability. You can click here to view the Trust's performance page.

In order to improve liquidity in its shares, in November 2000 the Company had a 5:1 stock split. Since its incorporation, the Company has had two tranches of warrants issued and subsequently exercised. Cumulatively, they have increased the assets of the Company by £15.4m. One distinctive feature of the Company is that it has had eleven continuation votes, which are now held annually. The most recent continuation vote was held on Wednesday 5th December 2007.

Please bear in mind that past performance is no guarantee of future performance. The value of your investment and any income from it is not guaranteed and may go down as well as up and you may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stockmarkets in which the Trust invests and by the supply and demand for the Trust's shares. Investment in investment trusts should be regarded as medium to long-term.

The Trust invests in overseas securities and will be affected by currency fluctuations. These can have a negative impact on the Trust's share price.

Investment in smaller companies is generally considered higher risk as their shares are usually more volatile and less liquid than those of larger companies; as a result, share price fluctuations may be greater than those of larger companies. Smaller companies may do less well in periods of adverse economic conditions.

Shareholders in the Trust have the right to vote at the Annual General Meeting on whether to continue the Trust. If the shareholders so decide, the assets will be sold and you will receive a cash sum that is dependent on the size of your shareholding.