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Investment strategy

Japan Income Growth

Japan offers the unexpected. Global leading manufacturers, premium Asian brands and emerging digital disruptors. We search for opportunities with the potential to provide great shareholder returns. 

Asian female traveller photographing the spectacular nature scenics of Arashiyama Bamboo forest with smartphone while travelling 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 in the hope of providing our clients with great returns. 

Japanese Equities: our philosophy

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

Searching for Japan’s finest

Japan Income Growth embraces a distinctly long-term approach to deliver total return. We aim to outperform the Topix benchmark by 1.5 per cent per annum over rolling five-year periods with an above-market yield. 

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 to take advantage of their idiosyncratic growth opportunities.  

We find these companies through bottom-up research, holding on for the long term with the aim of capturing 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.

Patient pursuit of opportunities

Our high-conviction portfolio is constructed from the bottom up, based on long-term earnings growth potential.  

We aim to capture growth in all forms – from secular opportunities in emerging digital disruptors to the enduring growth of stalwart franchises to special situations of corporate reform.  

The patience and insight 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. 

A history of hoarding cash points to an exciting future, where cash-rich growth companies begin to return excess capital to investors – at no expense to their own growth prospects.
Karen See

Meet the managers

Documents

Quarterly update

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

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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
1SBI Holdings4.4%
2DMG Mori4.1%
3MS&AD Insurance4.1%
4Sumitomo Mitsui Trust4.0%
5Tokio Marine Holdings Inc3.9%
6GMO Internet3.7%
7SoftBank Group3.7%
8Bridgestone3.1%
9Kubota3.0%
10FANUC2.9%

Strategy holdings by sector

All figures up to: 30 April 2024

1Manufacturing48.00%
2Finance & Insurance19.20%
3Transport And Communications10.90%
4Services8.30%
5Commerce8.00%
6Real Estate5.00%
7Cash0.50%
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.

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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:

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Insights

Viewing 13 of 13
  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. The fresh face of Japanese finance

    New online services are transforming Japanese financial habits.
    March 2024
    Article4 minutes
  3. 왜 지금 성장인가?

    어려운 시기에 발휘되는 파트너십 지배구조의 강점: 급격한 변화 속에서 적응하고 성장할 수 있는 이유에 대해 분석합니다.
    2024년 3월
    Document17분
  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. 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.
    Document

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. The fresh face of Japanese finance

    New online services are transforming Japanese financial habits.
    March 2024
    Article4 minutes
  3. 왜 지금 성장인가?

    어려운 시기에 발휘되는 파트너십 지배구조의 강점: 급격한 변화 속에서 적응하고 성장할 수 있는 이유에 대해 분석합니다.
    2024년 3월
    Document17분
  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. 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.
    Document

Explore further

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

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