Capital at risk
Japan Smaller Companies
Japan’s inefficiencies offer unbounded upside potential for its new breed of entrepreneurial companies. We aim to capture these opportunities. Each holding is selected for its long-term growth potential.
Backing businesses, not the economy
By focusing on the fundamentals, we aim to uncover Japan’s mispriced and often underappreciated opportunities. Our first-hand experience of Japan’s rich history offers us strong insight into the significant structural changes at play here.
Pursuing growth in all forms
Japan Smaller Companies is distinctly long-term. We aim to capture asymmetrical equity market returns by investing in Japan’s most promising small-cap stocks.
Our portfolio contains 40-80 holdings from range of sectors and industries, each held for its own long-term idiosyncratic growth prospects.
We find these companies through bottom-up research, holding on for the long term in a bid to capture the full benefits of compounded growth in all its forms – from secular opportunities in emerging digital disruptors to the enduring growth of stalwart franchises to special situations of corporate reform.
Embracing the entrepreneurial
We aim to capture Japan’s outlier growth opportunities: businesses that are breaking the mould, embracing an entrepreneurial and experimental mindset and attacking the profit pools of less efficient incumbents.
The patience with which we pursue these growth businesses is a product of our pedigree. Having launched specialist mandates in the 1980s, we’re one of the few who’ve been doing this for over 40 years.
Though the uncovered and undiscovered nature of Japanese small cap investing often comes with significant short-term volatility, it also presents the prospect of outsized long-term upside.
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Strategy portfolio holdings
A list of the top 10 holdings that the representative portfolio invests in.
All figures up to: 30 April 2024
| # | Holding | % of portfolio |
|---|---|---|
| 1 | Toyo Tanso | 3.6% |
| 2 | Lifenet Insurance | 3.2% |
| 3 | Cosmos Pharmaceutical | 3.0% |
| 4 | Nifco | 2.8% |
| 5 | KATITAS | 2.3% |
| 6 | SIIX | 2.3% |
| 7 | Nakanishi | 2.3% |
| 8 | WealthNavi | 2.3% |
| 9 | OSG | 2.1% |
| 10 | LITALICO | 2.1% |
Please note
The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.
Invest in this strategy
You can invest in this strategy through the following fund(s).
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Insights
Key articles, videos and podcasts relating to the strategy:
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Insights
The fresh face of Japanese finance
New online services are transforming Japanese financial habits.
Japan Stewardship Report
For the year ended September 2023.
Why growth, why now?
Tough times play to the partnership’s strengths: analysing what enables us to adapt and thrive amid rapid change.
Spotting the stars amid a surge
Rising Japanese markets are flattering old-style companies: better to look for long-term growth.
Japan’s place in the chip market
The Japanese semiconductor companies set to benefit from the rise of 5G and electric cars.
Why small is big in Japan
Praveen Kumar on the lesser-known players thriving in the shadow of the country’s big brands.
Japan Stewardship Report 2022
For the year ended September 2022.
Success after succession.
How can founder-defined companies – from Nidec to Nintendo – ensure success when it’s time for a new CEO?
The strengths of Japanese company culture
Companies such as Mercari that know that trying new things is the secret to growth.
Sysmex’s quest to diagnose disease.
Kobe medical diagnostics company is well-placed to capitalise on therapy breakthroughs.
Interview with our Japanese researchers
Donald Farquharson, head of the Japanese Equity Team at Baillie Gifford, speaks to Japan-based strategy researchers Akiko Hirai and Satoko Ishino.
Dominators vs disrupters - the future of industrial robotics
The big four incumbents in robotics are gearing up for a challenge. In a reshaping global industry, they are readying themselves for the march of the cobots.
The fresh face of Japanese finance
New online services are transforming Japanese financial habits.Japan Stewardship Report
For the year ended September 2023.Why growth, why now?
Tough times play to the partnership’s strengths: analysing what enables us to adapt and thrive amid rapid change.Spotting the stars amid a surge
Rising Japanese markets are flattering old-style companies: better to look for long-term growth.Japan’s place in the chip market
The Japanese semiconductor companies set to benefit from the rise of 5G and electric cars.Why small is big in Japan
Praveen Kumar on the lesser-known players thriving in the shadow of the country’s big brands.Japan Stewardship Report 2022
For the year ended September 2022.Success after succession.
How can founder-defined companies – from Nidec to Nintendo – ensure success when it’s time for a new CEO?The strengths of Japanese company culture
Companies such as Mercari that know that trying new things is the secret to growth.Sysmex’s quest to diagnose disease.
Kobe medical diagnostics company is well-placed to capitalise on therapy breakthroughs.Interview with our Japanese researchers
Donald Farquharson, head of the Japanese Equity Team at Baillie Gifford, speaks to Japan-based strategy researchers Akiko Hirai and Satoko Ishino.Dominators vs disrupters - the future of industrial robotics
The big four incumbents in robotics are gearing up for a challenge. In a reshaping global industry, they are readying themselves for the march of the cobots.
Invest in this strategy
You can invest in this strategy through the following fund(s).
Explore further
Curious to learn more about our products and what we can offer you? Please get in touch.
How to invest in this strategy
You can invest in this strategy through the following fund(s).
Explore further
Curious to learn more about our products and what we can offer you? Please get in touch.
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