By Jean-Baptiste Andrieux, Reporter, Trustnet, 21 June 2023:
Japan is back on investors’ radar after decades of being unloved, with the Nikkei 225 reaching a 33-year high this year.
In addition, Japanese equities received Warren Buffett’s seal of approval when he visited Japan in April to announce that Berkshire Hathaway would increase its investment in Japan. The company doubled down by increasing its stakes in five Japanese businesses this week.
For investors interested in walking in Buffett’s steps and increase their exposure to the country via a close-ended fund, Baillie Gifford Japan Trust (BGFD) and JPMorgan Japanese IT (JFJ) are two possible options that share a few commonalities.
Both have a tilt towards growth stocks, a similar ongoing charge figure (0.66% for BGJT and 0.61% for JPMJ) and roughly the same size (£735m for BGJT and £770m for JPMJ).
James Carthew, head of investment company research at QuotedData, added: “Both managing teams have a long-term buy-and-hold stock-picking approach.
“Turnover on the funds is about the same. JFJ’s list of 10-largest holdings rarely changes and its largest position has featured in JFJ’s portfolio since 2011.”
Over the last 10 years, both funds have underperformed the IT Japan sector albeit beating the TOPIX index.
Carthew said: “For many years, BGFD was the leading performer in its sector, but that hasn’t been true for quite a while now.
“About two years ago, the top slot was held by JFJ, now the sell-off in growth stocks has dented both funds’ returns.”
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