Capital at risk

Investment strategy

Japan Growth

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

We look beneath the surface and beyond the headlines to capture these inimitable opportunities within a concentrated portfolio of 35-55 companies. Each one is selected on its own merits and on its attractive long-term earnings growth potential.  

Robotic arm welding the car in a futuristic assembly automotive manufacturing plant.

Searching for Japan’s finest

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

Japanese Equities: our philosophy

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

Giving companies time to grow

Japan Growth is long-term. We aim to outperform the TOPIX Index by 2 per cent per annum over rolling five-year periods.  

Our high-conviction portfolio contains 35-55 holdings. We seek to take advantage of market inefficiencies by investing across different types of growth company, which, given our time horizon, allows us to take advantage of their idiosyncratic growth opportunities.  

We find these companies through bottom-up research, holding on for the long term, aiming to capture the full 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.

A diversity of opportunities

What we’re looking to do is 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 are one of the few strategies which have been doing this for over 40 years.  

Our first-hand experience of Japan’s rich history offers us a strong insight into the significant structural changes at play. 

It is an error to confuse a country’s economic growth with the prospects for individual businesses. This is particularly true in Japan, which constitutes a major opportunity for the growth investor.
Donald Farquharson

Meet the managers

Documents

Philosophy and process

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

Quarterly update

Get the latest investment commentary, portfolio overview, transactions and performance information alongside governance engagement and voting. 

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You can invest in this strategy through the following fund(s).

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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
1SoftBank Group5.4%
2Keyence4.5%
3Sony4.4%
4MS&AD Insurance4.2%
5Recruit Holdings4.1%
6SBI Holdings4.0%
7Sumitomo Mitsui Trust3.6%
8Mitsubishi Corp3.2%
9Murata Manufacturing3.1%
10Kubota3.0%

Strategy holdings by sector

All figures up to: 30 April 2024

1Manufacturing53.50%
2Finance & Insurance14.00%
3Transport And Communications12.20%
4Services11.90%
5Commerce8.50%
6Real Estate0.90%
7Cash-1.10%
Total 100%

Strategy holdings by sector

All figures up to: 30 April 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.

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.

Insights

Key articles, videos and podcasts relating to the strategy:

Filters

Insights

Viewing 25 of 25
  1. The landscape seen from lens in Shanghai, China

    China through a Japanese lens

    Japanese tech dominance is under increasing pressure in China from domestic challengers.
    May 2024
    Article8 minutes
  2. Japanese Equities Q1 update

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

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

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

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

    Matthew Brett discusses SoftBank and considers Japan’s exciting technological future.
    December 2023
    Video4 minutes
  7. 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
  8. Spotting the stars amid a surge

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

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

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

    Investment manager, Donald Farquharson, discusses the Baillie Gifford approach to Japanese Equities.
    September 2023
    Video4 minutes
  12. 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
  13. Japan Growth: Asia’s resurgence

    Despite the turbulence of last year there are reasons to be optimistic about Japanese companies.
    February 2023
    Video52 minutes
  14. Japan Stewardship Report 2022

    For the year ended September 2022.
    December 2022
    Document
  15. Japan trip reflections

    Less foreign visitors, more cashless payments. Donald Farquharson reflects on post-Covid Japan
    November 2022
    Article
  16. 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
  17. The strengths of Japanese company culture

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

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

    Japan’s ability to anticipate technological change should see it through the ups and downs to come.
    December 2021
    Article
  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 update

The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.

  1. The landscape seen from lens in Shanghai, China

    China through a Japanese lens

    Japanese tech dominance is under increasing pressure in China from domestic challengers.
    May 2024
    Article
  2. Japanese Equities Q1 update

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

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

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

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

    Matthew Brett discusses SoftBank and considers Japan’s exciting technological future.
    December 2023
    Video4 minutes
  7. 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
  8. Spotting the stars amid a surge

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

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

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

    Investment manager, Donald Farquharson, discusses the Baillie Gifford approach to Japanese Equities.
    September 2023
    Video4 minutes
  12. 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
  13. Japan Growth: Asia’s resurgence

    Despite the turbulence of last year there are reasons to be optimistic about Japanese companies.
    February 2023
    Video52 minutes
  14. Japan Stewardship Report 2022

    For the year ended September 2022.
    December 2022
    Document
  15. Japan trip reflections

    Less foreign visitors, more cashless payments. Donald Farquharson reflects on post-Covid Japan
    November 2022
    Article
  16. 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
  17. The strengths of Japanese company culture

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

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

    Japan’s ability to anticipate technological change should see it through the ups and downs to come.
    December 2021
    Article
  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

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.

Important information

The content of this website is intended exclusively for professional investors in accordance with MiFID legislation. ’Professional investors’ are potential investors who are deemed to have the status of “professional clients”, within the meaning of MiFID (2004/39/EC), as transposed in Ireland. It is not intended for retail investors.

Baillie Gifford Investment Management (Europe) Limited is authorised and regulated by the Central Bank of Ireland (Reference number C182354) as an Alternative Investment Fund Manager and UCITS Manager to Baillie Gifford Worldwide Funds plc. Its registered office is 4/5 School House Lane East, Dublin 2, D02 N279, Ireland.

This website is informative only and the information provided should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. Read our Legal and regulatory information for further details.