Baillie Gifford Japan Trust PLC outperformed its benchmark index over the year to 31 August 2016 by 4 percentage points. Net asset value per share, after deducting borrowings at fair value, rose 25.7%, while the TOPIX index gained 21.5%. In this period the Company’s share price increased by 16.3%. Having traded at a premium for most of the year, the Company’s shares are currently trading at a discount to NAV (after deducting borrowings at fair value) of 3.2%. Over the period the increase in the value of the Yen was greater than the decline in the TOPIX. Over five years the NAV has outperformed the benchmark by 8% pa and over ten years by 4% pa.
They have listed the major positive and negative contributions to performance by stock. Top of the list for positive contribution was Misumi Group which added 1.1% to the NAV. Outsourcing, Start Today, Park24 and CyberAgent added a further 2.9% between them. Toyo Tire & Rubber cost the fund 1.1% of NAV. Cookpad, HIS, Asics and DonQuijote cost the fund a total of 2.7%.
The manager says Misumi, which has been in the portfolio for over ten years, has successfully developed its business model to be competitive overseas as well as in Japan. Several internet related companies such as online fashion retailer Start Today, online advertiser CyberAgent and medical portal M3 also performed well over the period. In terms of holdings that hurt performance, Toyo Tire & Rubber was affected by a quality scandal in a minor division but, despite a poor year, is still amongst the largest contributors to performance over five years. Other stocks out of favour were Cookpad, the recipe website which suffered management changes, and HIS, which has a theme park near the Kumamoto earthquake region.
BGFD : Baillie Gifford Japan beats benchmark again