OverviewThe Baillie Gifford Japan Trust aims to pursue long-term capital growth principally through investment in medium to smaller sized Japanese companies, which are believed to have above average prospects for growth.
About the Trust
The Trust is the longest established existing Japanese investment trust, having survived the ebb and flow of corporate activity in the Japanese sector over the last 30 years. The first specialist Japanese investment trust was launched in the early 1970s, as Japan, undergoing rapid economic expansion, eased its restrictions on foreigners owning shares. Several other trusts were launched over the next few years and by the time the Trust was listed in December 1981 there were five Japanese investment trusts in existence.
The Trust’s policy is to pursue long-term capital growth rather than income. The Trust’s investment portfolio is actively managed and asset allocation at any point in time will reflect the Manager’s and the Board’s views.
The neutral policy is for shareholders’ funds to be fully invested. The Trust will typically consist of around 40 – 70 stocks. The size of the holding will normally reflect the conviction we have for the stock.
The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested.
The Baillie Gifford Japan Trust is an investment company within the meaning of section 833 of the Companies Act 2006. Registered in Scotland. Registered number: SC75954. Registered office: Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN.
The Trust is the longest established existing Japanese investment trust, having survived the ebb and flow of corporate activity in the Japanese sector over the last 30 years.
Meet our Trust ManagerSarah Whitley
Sarah graduated BA in Experimental Psychology from Oxford University in 1980. She joined Baillie Gifford in the same year, becoming a member of the Japanese team in 1982 and head of the department in 2001. Sarah is the longest standing partner within the firm, having been appointed in 1986. She is the lead manager for the Japan Investment Trust as well as co-manager for the Japanese All Cap strategy.
Meet our DirectorsNick Bannerman - Chairman
Nick Bannerman was appointed a Director in 2003 and became Chairman on 26 November 2014. He is Managing Director (Knitwear) of Johnstons of Elgin, Scotland’s largest textile company. Established in 1797, Johnstons is a fully vertical operation specialising in cashmere, with sales offices worldwide, including Tokyo. He is a Chartered Accountant.Paul Dimond CMG - Director
Paul Dimond was appointed a Director in 2006 and is the Senior Independent Director. In HM Diplomatic Service until 2005, he served for 16 years in Japan, working in both Tokyo and Osaka, and was Commercial Counsellor from 1989 to 1993. He had a senior British public service role in three continents, his last appointment being HM Ambassador to the Philippines. He is deputy chairman of DAKS Simpson Group plc and DAKS Limited, director of the Anglo-Netherlands Society and the Torch Trophy Trust.Martin Paling - Director
Martin Paling was appointed a Director in 2008. He was an investment director of Bentley Capital (Europe) Ltd between 1996 and 2008. From 1993 to 1996 he was deputy chief investment officer of Baring Asset Management (Asia) Ltd in Hong Kong. Prior to that he worked for James Capel & Co, where he was chief international investment strategist and James Capel (Far East) Ltd in Hong Kong where he directed institutional sales. Previously, he was a partner and head of Singapore/Malaysia sales at Montagu, Loebl, Stanley & Co.Keith Falconer - Director
Keith Falconer was appointed a Director in 2014 and became Chairman of the Audit Committee in 2014. He was with Martin Currie Investment Management Ltd from 1979 until his retirement in 2003 and between 1982 and 1987, he headed up the Japanese Equity team. He is Chairman of Impax Asset Management Group plc, Adelphi Distillery Ltd and two funds managed by Rays Capital Partners in Hong Kong; Asian Equity Special Opportunities Fund and Asian Opportunities Absolute Return Fund. He is a non-executive director of the China A Share Fund. He qualified as a Chartered Accountant.David Kidd - Director
David Kidd was appointed a Director on 30 November 2015. He has 25 years investment experience in the City, mainly in the role of chief investment officer. For the past 8 years he has been a director of The Law Debenture Pension Trust Corporation PLC where he is an independent professional trustee. He is also a director of The Golden Charter Trust Limited and of Martin Currie Global Portfolio Trust plc.
The portfolio is constructed through the identification of individual companies which offer long term growth potential, typically over a three to five year horizon.
ObjectiveThe Baillie Gifford Japan Trust aims to achieve long term capital growth principally through investment in medium to smaller sized Japanese companies which are believed to have above average prospects for growth, although it invests in larger companies when considered appropriate.
The Company’s holdings are generally listed in Japan although the portfolio can also include companies listed elsewhere whose business is predominantly in Japan as well as unlisted companies. From time to time, fixed interest holdings, or non equity investments, may be held.
The portfolio is constructed through the identification of individual companies which offer long term growth potential, typically over a three to five year horizon. The portfolio is actively managed and does not seek to track the benchmark, hence a degree of volatility against the index is inevitable.
In constructing the equity portfolio a spread of risk is achieved by diversifying the portfolio through investment in 40 to 70 holdings. Although sector concentration and the thematic characteristics of the portfolio are carefully monitored, there are no maximum limits to deviation from benchmark stock or sector weights except as imposed by banking covenants on borrowings.
On acquisition, no holding shall exceed 5% of the portfolio at the time of purchase and any holding that as a result of good Directors’ Report performance exceeds 5% of the portfolio is subject to particular scrutiny. A holding greater than 5% will only be held where the Managers continue to be convinced of the merits of the investment case.
On acquisition, no more than 15% of the Company’s gross assets will be invested in other UK listed investment companies.
The Company may use derivatives which will be principally, but not exclusively, for the purpose of efficient portfolio management (i.e. for the purpose of reducing, transferring or eliminating investment risk in its investments, including protection against currency risks).
The Company recognises the long term advantages of gearing and has a maximum equity gearing level of 30% of shareholders’ funds.
Borrowings are invested in securities when it is considered that investment grounds merit the Company taking a geared position. Gearing levels, and the extent of equity gearing, are discussed by the Board and Managers at every Board meeting.