|
Baillie Gifford Japan Trust PLC on Thursday posted interim net asset value per share gains, but saw its total return lag its benchmark. The trust, managed by Edinburgh, Scotland-based Baillie Gifford, invests for long-term capital growth mostly in medium to smaller sized Japanese companies. Baillie Gifford Japan reported a net asset value total return per share of 4.4% for the six months that ended February 28, while its benchmark, the Tokyo Stock Price Index, or TOPIX, returned 22.4% over the same period. Net asset value per share rose 3.4% to 1,051.9 pence at February 28, from 1,017.1p at August 25. Discussing performance, the investment trust noted that several of its largest growth holdings served as detractors, despite ‘continued positive operational progress’. Baillie Gifford Japan said the largest detractors from relative performance were CyberAgent, GMO Internet Group, Rakuten, SBI Holdings and GA Technologies. Shares in the company fell 3.1% to 848.04 pence on Thursday morning in London, but are up 16% over the past year. Chair Sam Davis said the country’s investment case remains strong, describing the yen as ‘undervalued’ and noting that Japan has ‘a deep and liquid equity market which, unusually among developed markets, continues to see growth in new listings’. ‘Japan also faces well-known demographic challenges which weigh on overall economic growth, a situation which supports the thesis that the growth companies in which your company invests should command a premium valuation over time. Your manager remains confident that the growth the portfolio holdings offer is highly attractive relative to their valuations,’ Davis commented. ‘That said, arguably this thesis has not been borne out by the company’s performance and is potentially further challenged, at least in the near term, by the policy direction of Japan’s new prime minister. ‘The board is giving close consideration to this central issue, alongside continued scrutiny of the investment process and remains focused on building value for shareholders over the long term,’ the chair added. Sanae Takaichi was elected prime minister of Japan in October. The 64-year old leader is seen as a China hawk and traditionalist from the Liberal Democratic Party’s right wing. Her bid for the position was nearly derailed when the LDP’s coalition with the Komeito party fell apart. LDP, however, entered a new coalition with the Japan Innovation Party, allowing Takaichi to take over as the country’s fifth prime minister in as many years. Takaichi has outlined plans to revive the Japanese economy by investing in key areas such as AI, chips and shipbuilding. In late November, Takaichi’s government approved a stimulus packaged worth JP¥21.3 trillion, approximately $135 billion. Responding to concerns over the debt burden this could create, Japan introduced its own version of the US government’s cost-cutting Department of Government Efficiency, known as the Office in Charge of Reviewing Special Tax Measures & Subsidies. The office is expected to become fully functional in 2026, with its impact reflected in the budget for the fiscal year that begins in April 2027. Copyright 2026 Alliance News Ltd. All Rights Reserved.
|
