Baillie Gifford Japan Trust outperforms benchmark

Edinburgh-based investment company Baillie Gifford Japan Trust announced on Monday that it had beaten market expectations in its fiscal year ended 31 August thanks to above average performances from Japanese equities over the period.

Baillie Gifford said it saw its net asset value (NAV) per share move forward 27.6% throughout the year to sit at 682.4p as net assets rose from £425m to £575.2m

The trust said the main reason for its improved performance was the increased value of the Tokyo Stock Price Index and its 24.3% increase in Yen on a total return basis which offset the fact that the currency had weakened 4.4% against Sterling over the latest twelve months

In its annual financial statement, the firm said, "Last year's concerns surrounding the potential for a significant Chinese slowdown failed to materialise, global stock markets generally progressed upwards and Japan is increasingly seen as a haven of relative stability."

Chairman Nick Bannerman said, "The year to 2017 saw ongoing strength in Japanese equities. Our managers continued to find extremely interesting companies in which to invest, with their expertly researched 'bottom-up' approach to stock selection adding significant value to the portfolio."

"Business sentiment in Japan has been improving in recent years, with many positive aspects to the economic and consumer confidence indices following through into company results and consumer activity. However, with political tension in the region rising following North Korea's missile testing and President Trump's written and verbal reactions adding to that tension, we remain vigilant in assessing the impact such uncertainties can bring to the stocks we invest in," Bannerman added.

Baillie Gifford highlighted the healthcare industry as one of particular opportunity, as it sought to acquire three new holdings in the sector over the year.

The firm said it would not pay any dividends "as in previous years" while the revenue reserve remained in deficit.

As of 1410 BST, Baillie Gifford Japan Trust shares had slipped 1.29% to 715.66p.