Capital at risk

Investment strategy

Japan All Cap

Japan offers the unexpected. Global leading manufacturers, premium Asian brands and emerging digital disruptors.  

The Japan All Cap Strategy looks beneath the surface and beyond the headlines to capture these opportunities. Each portfolio holding is selected on its own merits and long-term earnings growth potential.  

High angle view of people walking at subway station in Kyoto, Japan.

Backing businesses, not the economy

By focusing on the fundamentals, we aim to uncover Japan’s mispriced and often under-appreciated opportunities.

Japanese Equities: our philosophy

Investment manager Donald Farquharson introduces Japanese Equities, reflecting on the exciting opportunities ahead.

Aiming for outperformance

Japan All Cap is long-term focused. We aim to outperform the TOPIX index by 2 per cent per annum over rolling five-year periods.  

Our portfolio contains 45-65 holdings. We seek to take advantage of market inefficiencies by investing across different types of growth company which, given our time horizon, allows us the opportunity to take advantage of their idiosyncratic growth opportunities.  

We find these companies through bottom-up research; holding on for the long term and aiming to capture the benefits of compounded growth.  

The performance target is aspirational and is not guaranteed. We don’t use it to compile the portfolio and returns will vary. A single performance target may not be appropriate across all vehicles and jurisdictions. We may not meet our investment objectives if, for example, our growth investment style is out of favour, or we misjudge the long-term earnings growth of our holdings.

Being patient with potential

We aim to capture 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.  

The patience with which we pursue this broad base of potential 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.  

Our experience of Japan’s rich history offers us an insight into the significant structural changes at play here.  

A classic analogy for competitive advantage is moats: we’re not interested in how deep the moat will be in the immediate future, but in how deep it will be in five years’ time and beyond.
Matthew Brett

Meet the manager

Matthew Brett

Matthew Brett

Matthew is an investment manager in the Japanese Equities Team. He joined Baillie Gifford in 2003 and became a partner in 2018. He is manager of the Japanese Fund (and related All Cap Strategy segregated accounts), manager of the Baillie Gifford Japan Trust and co-manager of the Japanese Income Growth Fund. Matthew graduated BA (Hons) in Natural Sciences (Psychology) from the University of Cambridge in 2000 and holds a PhD in Psychology from the University of Bristol.

Documents

Philosophy and process

Explore our investment philosophy and the processes around how the team constructs the portfolio.

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Strategy portfolio holdings

A list of the top 10 holdings that the representative portfolio invests in.

All figures up to: 31 March 2024

#Holding% of portfolio
1SoftBank Group7.3%
2Rakuten4.9%
3Sumitomo Mitsui Trust4.8%
4SBI Holdings4.2%
5MS&AD Insurance4.2%
6Nintendo3.5%
7GMO Internet3.4%
8CyberAgent3.1%
9Bridgestone2.9%
10Japan Exchange Group2.9%

Strategy holdings by sector

All figures up to: 31 March 2024

1Manufacturing46.80%
2Finance & Insurance16.50%
3Transport And Communications14.80%
4Services14.80%
5Real Estate3.70%
6Commerce3.50%
7Cash-0.10%
Total 100%

Strategy holdings by sector

All figures up to: 31 March 2024

Total: 100%

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.

Explore further

Curious to learn more about our products and what we can offer you? Please get in touch.

Insights

Key articles, videos and podcasts relating to the strategy:

Filters

Insights

Viewing 25 of 25
  1. Japanese Equities Q1 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    April 2024
    Video18 minutes
  2. The fresh face of Japanese finance

    New online services are transforming Japanese financial habits.
    March 2024
    Article4 minutes
  3. Japan Stewardship Report

    For the year ended September 2023.
    February 2024
    Document
  4. Japanese Equities Q4 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    January 2024
    Video12 minutes
  5. Stock story: SoftBank

    Matthew Brett discusses SoftBank and considers Japan’s exciting technological future.
    December 2023
    Video4 minutes
  6. Why growth, why now?

    Tough times play to the partnership’s strengths: analysing what enables us to adapt and thrive amid rapid change.
    December 2023
    Article17 minutes
  7. Spotting the stars amid a surge

    Rising Japanese markets are flattering old-style companies: better to look for long-term growth.
    November 2023
    Document
  8. Japan’s new growth opportunities

    Seeking the entrepreneurial firms that could sustain the country’s rally.
    November 2023
    Article
  9. Japanese Equities Q3 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    October 2023
    Video12 minutes
  10. Japanese Equities

    Investment manager, Donald Farquharson, discusses the Baillie Gifford approach to Japanese Equities.
    September 2023
    Video4 minutes
  11. Japan’s place in the chip market

    The Japanese semiconductor companies set to benefit from the rise of 5G and electric cars.
    March 2023
    Article
  12. Japan Stewardship Report 2022

    For the year ended September 2022.
    December 2022
    Document
  13. Japanese Equities update

    Fund manager Matthew Brett and investment specialist Thomas Patchett discuss growth investing in Japan.
    October 2022
    Video60 minutes
  14. Investing in Japan: the country’s underappreciated edge

    Matthew Brett explains why inflation and a falling yen make Japan an exciting place for investors.
    July 2021
    Video14 minutes
  15. Success after succession.

    How can founder-defined companies – from Nidec to Nintendo – ensure success when it’s time for a new CEO?
    June 2022
    Article
  16. The strengths of Japanese company culture

    Companies such as Mercari that know that trying new things is the secret to growth.
    March 2022
    Article
  17. Sysmex’s quest to diagnose disease.

    Kobe medical diagnostics company is well-placed to capitalise on therapy breakthroughs.
    January 2022
    Article
  18. Four decades of lessons.

    Japan’s ability to anticipate technological change should see it through the ups and downs to come.
    December 2021
    Article
  19. Investing in Japan: What’s changed and what’s next?

    Over four decades Japan has seen 21 prime ministers come and go. Exporters such as Toyota and Toshiba have flourished but the country has also struggled with debt and deflation. Matthew Brett, investment manager, discusses what’s next.
    November 2021
    Podcast16 minutes
  20. The return of the durable winners

    Japan’s big brands are back, thanks to Chinese consumers, digitisation and better governance.
    September 2021
    Article
  21. How Japan weathered Covid

    The resilience of the Japanese economy still managed to deliver dividends despite the pandemic.
    September 2021
    Article
  22. Adapting to disrupt

    In Japan as elsewhere, companies that can adapt quickly often have the most success.
    September 2021
    Article
  23. SBI: Japan’s fintech frontrunner

    How an entrepreneurial tech company disrupted the world of Japanese financial services.
    September 2021
    Article
  24. Japan Smaller Companies: the winners

    The effects of Covid-19 were felt very differently across the smaller companies landscape.
    September 2021
    Article
  25. 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.
    March 2021
    Video15 minutes

Japanese Equities Q1 investment update

Investment manager Karen See and investment specialist Sarah Clark give an update on the Japan All Cap, Japan Growth and Japan Income Growth strategies covering Q4 2023.

Related insights

  1. Japanese Equities Q1 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    April 2024
    Video18 minutes
  2. The fresh face of Japanese finance

    New online services are transforming Japanese financial habits.
    March 2024
    Article4 minutes
  3. Japan Stewardship Report

    For the year ended September 2023.
    February 2024
    Document
  4. Japanese Equities Q4 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    January 2024
    Video12 minutes
  5. Stock story: SoftBank

    Matthew Brett discusses SoftBank and considers Japan’s exciting technological future.
    December 2023
    Video4 minutes
  6. Why growth, why now?

    Tough times play to the partnership’s strengths: analysing what enables us to adapt and thrive amid rapid change.
    December 2023
    Article17 minutes
  7. Spotting the stars amid a surge

    Rising Japanese markets are flattering old-style companies: better to look for long-term growth.
    November 2023
    Document
  8. Japan’s new growth opportunities

    Seeking the entrepreneurial firms that could sustain the country’s rally.
    November 2023
    Article
  9. Japanese Equities Q3 update

    The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
    October 2023
    Video12 minutes
  10. Japanese Equities

    Investment manager, Donald Farquharson, discusses the Baillie Gifford approach to Japanese Equities.
    September 2023
    Video4 minutes
  11. Japan’s place in the chip market

    The Japanese semiconductor companies set to benefit from the rise of 5G and electric cars.
    March 2023
    Article
  12. Japan Stewardship Report 2022

    For the year ended September 2022.
    December 2022
    Document
  13. Japanese Equities update

    Fund manager Matthew Brett and investment specialist Thomas Patchett discuss growth investing in Japan.
    October 2022
    Video60 minutes
  14. Investing in Japan: the country’s underappreciated edge

    Matthew Brett explains why inflation and a falling yen make Japan an exciting place for investors.
    July 2021
    Video14 minutes
  15. Success after succession.

    How can founder-defined companies – from Nidec to Nintendo – ensure success when it’s time for a new CEO?
    June 2022
    Article
  16. The strengths of Japanese company culture

    Companies such as Mercari that know that trying new things is the secret to growth.
    March 2022
    Article
  17. Sysmex’s quest to diagnose disease.

    Kobe medical diagnostics company is well-placed to capitalise on therapy breakthroughs.
    January 2022
    Article
  18. Four decades of lessons.

    Japan’s ability to anticipate technological change should see it through the ups and downs to come.
    December 2021
    Article
  19. Investing in Japan: What’s changed and what’s next?

    Over four decades Japan has seen 21 prime ministers come and go. Exporters such as Toyota and Toshiba have flourished but the country has also struggled with debt and deflation. Matthew Brett, investment manager, discusses what’s next.
    November 2021
    Podcast16 minutes
  20. The return of the durable winners

    Japan’s big brands are back, thanks to Chinese consumers, digitisation and better governance.
    September 2021
    Article
  21. How Japan weathered Covid

    The resilience of the Japanese economy still managed to deliver dividends despite the pandemic.
    September 2021
    Article
  22. Adapting to disrupt

    In Japan as elsewhere, companies that can adapt quickly often have the most success.
    September 2021
    Article
  23. SBI: Japan’s fintech frontrunner

    How an entrepreneurial tech company disrupted the world of Japanese financial services.
    September 2021
    Article
  24. Japan Smaller Companies: the winners

    The effects of Covid-19 were felt very differently across the smaller companies landscape.
    September 2021
    Article
  25. 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.
    March 2021
    Video15 minutes

Explore further

Curious to learn more about our products and what we can offer you? Please get in touch.

Important information

Please remember that all investment strategies have the potential for profit and loss and your or your clients’ capital may be at risk.
 
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