The Baillie Gifford Japan Trust outperformed its benchmark index, TOPIX, over the year to 31 August 2015 by 7 percentage points. Net asset value per share, after deducting borrowings at fair value, rose 20.4%, while the benchmark index gained 13.4%. In this period the Company’s share price increased by 26.3%.
The statement say the positive absolute and relative outperformance came from investment in a variety of sectors and stocks as a broad spectrum of stocks performed well. There were thirteen individual stock contributors of more than 0.5% to outperformance and five which detracted at the same level.
The strongest returns within the portfolio came from the Commerce and Services sector which includes several of the internet related holdings, as well as companies involved in employment services. Notable amongst the winners were Cookpad, the recipe website which has continued to gather paying members, new recipes and is moving into advertising to its substantial subscriber base, Sysmex and Shimadzu, both manufacturers of medical equipment, and Don Quijote, the discount retailer benefiting from inbound tourism. Toyo Tire and Rubber continues to do well selling truck tyres in the USA whilst Temp Holding and Outsourcing both were helped by the labour shortage in Japan and the increase in women in the workforce. Those that detracted from performance included Iriso electronics, which did very well last year and has had some pricing issues, along with energy related holdings Modec and Inpex.
Gearing was also beneficial to returns, with gearing standing at 14% of shareholders’ funds as at year end (31 August 2014 – 15%). Additional borrowings of ¥3bn were drawn during the course of the year to reflect growth in the asset base.
BGFD : Baillie Gifford Japan chalks up another great year