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.
Japanese Equities Q1 investment update
The Japanese Equities Team reflects on recent performance, portfolio changes and market developments over the last quarter.
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.
Meet the manager
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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 |
|---|---|---|
| 1 | Toyo Tanso | 3.7% |
| 2 | Lifenet Insurance | 3.1% |
| 3 | Cosmos Pharmaceutical | 2.9% |
| 4 | WealthNavi | 2.7% |
| 5 | Asahi Intecc | 2.5% |
| 6 | Nifco | 2.5% |
| 7 | LITALICO | 2.3% |
| 8 | GMO Financial Gate | 2.3% |
| 9 | KATITAS | 2.3% |
| 10 | SIIX | 2.3% |
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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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.
왜 지금 성장인가?
어려운 시기에 발휘되는 파트너십 지배구조의 강점: 급격한 변화 속에서 적응하고 성장할 수 있는 이유에 대해 분석합니다.
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 new growth opportunities
Seeking the entrepreneurial firms that could sustain the country’s rally.
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.
Four decades of lessons.
Japan’s ability to anticipate technological change should see it through the ups and downs to come.
The return of the durable winners
Japan’s big brands are back, thanks to Chinese consumers, digitisation and better governance.
How Japan weathered Covid
The resilience of the Japanese economy still managed to deliver dividends despite the pandemic.
Adapting to disrupt
In Japan as elsewhere, companies that can adapt quickly often have the most success.
SBI: Japan’s fintech frontrunner
How an entrepreneurial tech company disrupted the world of Japanese financial services.
Japan Smaller Companies: the winners
The effects of Covid-19 were felt very differently across the smaller companies landscape.
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.
Japanese Equities Q1 investment update
The Japanese Equities Team reflects on recent performance, portfolio changes and market developments.
Related insights
The fresh face of Japanese finance
New online services are transforming Japanese financial habits.왜 지금 성장인가?
어려운 시기에 발휘되는 파트너십 지배구조의 강점: 급격한 변화 속에서 적응하고 성장할 수 있는 이유에 대해 분석합니다.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 new growth opportunities
Seeking the entrepreneurial firms that could sustain the country’s rally.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.Four decades of lessons.
Japan’s ability to anticipate technological change should see it through the ups and downs to come.The return of the durable winners
Japan’s big brands are back, thanks to Chinese consumers, digitisation and better governance.How Japan weathered Covid
The resilience of the Japanese economy still managed to deliver dividends despite the pandemic.Adapting to disrupt
In Japan as elsewhere, companies that can adapt quickly often have the most success.SBI: Japan’s fintech frontrunner
How an entrepreneurial tech company disrupted the world of Japanese financial services.Japan Smaller Companies: the winners
The effects of Covid-19 were felt very differently across the smaller companies landscape.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.
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Curious to learn more about our products and what we can offer you? Please get in touch.
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