Baillie Gifford Japan’s Sarah Whitley to retire – Baillie Gifford Japan Trust has announced its results for the year ended 31 August 2017. At the same time, it says that Sarah Whitley, manager of the fund since 1991, is to retire on 30 April 2018.
Baillie Gifford, with the full support of the Board and Sarah Whitley, will appoint Matthew Brett as the portfolio manager and Praveen Kumar as the deputy portfolio manager with effect from 30 April 2018. Sarah will work closely with Matthew and Praveen to ensure a smooth transition in portfolio management responsibilities.
Matthew Brett joined Baillie Gifford in 2003 and is an Investment Manager in the Japanese Equities team. He co-manages the £1.8bn Baillie Gifford Japanese Fund with Sarah and has been attending all Japan Trust Board meetings since 2008, providing excellent insight on our investments. Praveen Kumar joined Baillie Gifford in 2008, is the portfolio manager of Baillie Gifford Shin Nippon PLC.
The chairman said: “On behalf of the Board I would like to thank Sarah for her truly significant contribution to the Company. Her dedicated professionalism, quite exceptional knowledge of Japan and its markets and discriminating judgement have been accompanied throughout the four decades of her career by an unswerving enthusiasm for all things Japanese. That Sarah was often in the minority of investors to firmly believe in the ongoing investment opportunities in Japanese companies has brought great benefit to the Japan Trust. Sarah has managed the Company since 1991 and, in the period from 30 September 1991 to 31 August 2017, the Company’s NAV increased by 545% compared to the return on the TOPIX index (in sterling terms) of 156% and she has mentored those on the Baillie Gifford Japan Desk with great success. In Matthew Brett we have a fine successor to Sarah having worked with the Board for almost ten years, and I look forward to the continued success of the Trust under his stewardship.”
The trust outperformed its benchmark index over the year to 31 August 2017 by 8.8%. Net asset value per share, after deducting borrowings at fair value, rose 27.6%, while the benchmark index gained 18.8%. The share price increased by 37.5%.
Sarah says that the main driver of the strong absolute return was the increase in the value of the TOPIX which rose 24.3% in Yen on a total return basis, slightly exceeding the high of 2015 on a total return basis. The Company also borrows in Yen to invest in stocks and this decision was helpful to performance given the strong absolute return in Yen. The Yen weakened 4.4% against Sterling to Yen141.8 per GBP1, slightly reducing the return in Sterling. 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.
Over one year the best performing stock (Yaskawa Electric) delivered double the performance than the worst (M3) subtracted. Over five years the difference rises to over three times. The returns have come from a diverse range of companies – including manufacturers, internet businesses, financials and service companies. The top ten contributors and detractors from returns are shown below.
Yaskawa Electric 1.6 M3 (0.7)
Start Today 1.6 Takara Leben (0.7)
Outsourcing 1.1 GMO Internet (0.7)
IRISO Electronics 0.9 Rakuten (0.7)
Toyota Motor 0.7 Sysmex (0.5)
Misumi Group 0.7 Asics (0.5)
Pigeon 0.6 Park24 (0.5)
Nitori 0.5 Subaru (0.4)
Disco 0.4 Mazda Motor (0.3)
Toyo Tire & Rubber 0.4 Cookpad (0.3)
BGFD : Baillie Gifford Japan’s Sarah Whitley to retire