Baillie Gifford Japanese B Acc

Japanese Equities

Rated Fund 2014-15, 2018-19. Identifies leading global businesses

This fund is the open-ended sister to the Baillie Gifford Japan investment trust. We introduced it last year on the basis that it is well suited to investors who want to tap into the experience of its Japanese equities team without either paying a premium or taking the added risk of gearing.

Matthew Brett is its lead manager and Praveen Kumar his deputy, a duo that has been in place since veteran Japanese investor Sarah Whitley retired in 2018. Baillie Gifford’s investment style is team-based, so there has been no change to the investment approach here.

The managers seek to identify companies – typically 50 to 60 – that have potential to grow over the long term. The fund has a greater weighting towards large companies than the investment trust. Overall, there is 60% overlap between the two propositions.

The managers say that, in contrast to other major markets, growth often commands little or no valuation premium in Japan, so they look to identify leading global businesses that trade on a substantial discount to their peers.

Key factors that drive overall stock selection include a competitive advantage, robust finances and strong management alignment with shareholders.

The fund tends to perform well when high-growth companies do well, particularly those in the consumer-facing and technology sectors. Picking the right companies within these areas has led to strong outperformance.

Wealth manager Rowan Dartington has used this fund for the past six years for balanced investors, especially when the investment trust is trading at a premium. Investment director Tim Cockerill says: “Bottom-up, growth-orientated and long-term, the Baillie Gifford Japanese strategy has paid off very well.”

Narrative and ratings content all as of 01 January 2019.

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Name
Baillie Gifford Japanese B Acc
Manager
Baillie Gifford & Co Limited.
Type
Open Ended Investment Company
ISIN
GB0006011133
Sector
Japan
Launched
08/10/1984
OCF
0.62 %
Risk Rating
5
3 Year Sharpe
0.89
3 Year Alpha
2.61
Yield
1.1 %
Benchmark
TOPIX TR JPY
The Fund aims to outperform (after deduction of costs) the TOPIX, as stated in Sterling, by at least 1.5% per annum over rolling five-year periods.The Fund will invest at least 90% in shares of Japanese companies being those which are listed, incorporated, domiciled or conducting a significant portion of their business in Japan. The Sub-fund will be actively managed and will invest in companies of any size and sector.
Holding %
SoftBank Group Corp 8.49 %
Rakuten Inc 4.05 %
SBI Holdings Inc 4.04 %
Sumitomo Mitsui Trust Holdings Inc 3.85 %
Inpex Corp 3.62 %
Kubota Corp 3.18 %
Toyota Motor Corp 2.83 %
Fanuc Corp 2.58 %
GMO internet Inc 2.57 %
MISUMI Group Inc 2.51 %
Region %
Japan 100.00 %
Sector %
Technology 18.93 %
Industrials 16.98 %
Consumer Cyclical 15.77 %
Financial Services 13.63 %
Communication Services 12.25 %
Energy 6.49 %
Consumer Defensive 5.16 %
Name
Baillie Gifford & Co Limited.
Address
EH1 3AN, Edinburgh, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Matthew Brett
Joined 06/01/2008

Matthew graduated BA (Hons) in Natural Sciences (Psychology) from the University of Cambridge in 2003 and holds a PhD in Psychology from Bristol University. He joined Baillie Gifford in 2003 and is an Investment Manager in the Japanese Equity Team. Matthew is a co-manager of the Japanese All cap strategy and is a CFA Charterholder.

Data provided by Morningstar.

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