Baillie Gifford Japan benefits from positive stock selection – the annual statement for Baillie Gifford Japan (BGFD) has been released.
Performance
The company’s net asset value returned 22.1% (total return in sterling terms). By comparison, the company’s benchmark, the TOPIX index rose by 7.8% on the same basis. This was after deducting borrowings at fair value.
The share price increased by 20.2%, which is at a premium to NAV of 2.7%.
Baillie Gifford Japan was promoted into the FTSE 250 in March 2018.
The main driver of returns was stock picking – the company had a number of successes from its holdings in internet companies, including SBI (online broker and venture capital investor), CyberAgent (internet advertising and content) and Digital Garage (internet investor).
The company also borrows in Yen to invest in stocks. this was positive due to the strong absolute performance in Yen. In the same way, the rise in the TOPIX in Yen terms contributed positively. However, during the report period, the Japaneses currency weakened a little (1.6%) against Sterling, fractionally reducing the return in Sterling.
Outlook: the investment manager, Baillie Gifford Japan
“While volatility and set-backs from time to time will happen, the most important thing for us is to have access to quality growth companies. Many of the companies that we own are still nearer the start than the end of their growth. The Internet continues to allow companies to compete against incumbents with a powerful combination of a lower cost-base and better service. Robotics and automation businesses listed in Japan have world-leading competitiveness and a very large growth opportunity as they enter new industries. Finally, new categories of growth companies continue to appear – emerging healthcare being a recent example.
We continue to be excited about the opportunities for growth stock-picking in Japan and believe that a well-executed strategy can deliver results. Your Company is positioned to benefit from long-term technology changes and we will strive to build on its heritage of success. “
BGFD : Baillie Gifford Japan benefits from positive stock selection