Baillie Gifford Shin Nippon

Rated Fund 2015-19. Backs the next generation of company entrepreneurs

Winner of Money Observer’s Best Japan Trust award in 2017 and 2018, this is the stablemate to Baillie Gifford Japan, but differs in that it focuses exclusively on high-growth smaller companies.

Although many of Japan’s corporate giants are well known to foreign investors, its smaller companies receive scant investment research coverage, so this part of the market is where some of the strongest gains can be made.

It is typically higher risk, making this trust suitable for those who are very optimistic on the outlook for Japanese equities. Such an investor is East Sussex-based Skerritts Wealth Management. Investment manager Charlie Lloyd says: “We retain conviction in Japan, despite recent volatility. This trust invests in small and mid-caps so is very much a play on domestic themes in Japan.”

FundCalibre, the fund ratings and research provider, points to its pedigree as the best-performing Japanese fund, both closed and open-ended, since Shinzō Abe came to power.

Shin Nippon means New Japan and Praveen Kumar, the trust’s manager since the end of 2015, focuses on 40 to 75 companies in emerging and disruptive sectors where he sees innovative growth opportunities.

He points out that the majority of Shin Nippon’s holdings are managed by younger, more progressive management than is typical in Japan. He pays little attention to the benchmark, as demonstrated by an “active share” of 93%.

At the end of 2018, the trust had invested 11 of a 12% gearing facility. Its premium crept into double digits occasionally during 2018, but the shares could also be found trading close to the value of underlying assets thanks to a discount control mechanism.

Narrative and rating as of January 2019. 

See all Money Observer rated funds
Name
Baillie Gifford Shin Nippon
Manager
Baillie Gifford & Co Limited.
Type
Closed Ended Investment Company
ISIN
GB00BFXYH242
Sector
Japanese Smaller Companies
Launched
31/07/1985
OCF
0.89 %
Risk Rating
5
3 Year Sharpe
1.03
3 Year Alpha
7.81
Yield
0 %
Benchmark
MSCI Japan Small Cap GR USD
Fund Size
£ 478.48 million
NAV
165
Gearing
110
Discount Premium
6
Aims to achieve long-term capital growth principally through investment in small Japanese companies which are believed to have above average prospects for growth.
Holding %
MonotaRO Co Ltd 4.08 %
Yume No Machi Souzou Iinkai Co Ltd 3.60 %
istyle Inc 3.24 %
Asahi Intecc Co Ltd 3.20 %
Bengo4.com Inc 3.17 %
GMO Payment Gateway Inc 2.91 %
Noritsu Koki Co Ltd 2.63 %
OUTSOURCING Inc 2.53 %
Nihon M&A Center Inc 2.41 %
Raksul Inc Ordinary Shares 2.27 %
Region %
Japan 100.00 %
Sector %
Technology 36.56 %
Industrials 24.43 %
Consumer Cyclical 14.99 %
Healthcare 10.40 %
Consumer Defensive 5.22 %
Name
Baillie Gifford & Co Limited.
Address
EH1 3AN, Edinburgh, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Praveen Kumar
Joined 11/30/2015

Praveen Kumar joined Baillie Gifford in 2008 and became an investment manager on the Japanese Equities team in 2011. He graduated BEng in Computer Science from Bangalore University in 2001, and has an MBA in Finance from Cambridge University in 2008. He previously worked for FKI Logistex before joining Baillie Gifford in 2008.

Data provided by Morningstar.

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