Baillie Gifford Japanese B Acc
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.See all Money Observer rated funds
|SoftBank Group Corp||8.57 %|
|Rakuten Inc||4.39 %|
|Inpex Corp||3.99 %|
|Sumitomo Mitsui Trust Holdings Inc||3.94 %|
|SBI Holdings Inc||3.85 %|
|Kubota Corp||3.12 %|
|MISUMI Group Inc||2.89 %|
|Toyota Motor Corp||2.70 %|
|Fanuc Corp||2.68 %|
|GMO internet Inc||2.44 %|
|Consumer Cyclical||16.18 %|
|Financial Services||13.63 %|
|Communication Services||12.02 %|
|Consumer Defensive||5.56 %|
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.
Sarah graduated BA in Experimental Psychology from Oxford University in 1980. She joined Baillie Gifford in the same year, become 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. Sarah is also a member of the EAFE Alpha Portfolio Construction Group.
Data provided by Morningstar.
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