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

Investment manager, Donald Farquharson, discusses the Baillie Gifford approach to Japanese Equities.

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 January 2024

#Holding% of portfolio
1SoftBank Group5.5%
2Sumitomo Mitsui Trust4.8%
3SBI Holdings4.2%
4Rakuten4.0%
5Nintendo3.8%
6GMO Internet3.6%
7MS&AD Insurance3.4%
8Sony3.3%
9Bridgestone3.2%
10Kubota2.8%

Strategy holdings by sector

All figures up to: 31 January 2024

1Manufacturing48.80%
2Finance & Insurance15.90%
3Transport And Communications13.70%
4Services13.30%
5Commerce5.20%
6Real Estate3.50%
7Cash-0.30%
Total 100%

Strategy holdings by sector

All figures up to: 31 January 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.

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.