abrdn Japan Investment Trust
Interim results update
09.00 – 10.00 on 28th November 2022
We are pleased to inform you that the abrdn Japan Investment Trust PLC interim results to 30th September 2022 have been published and are available to view here.
AJIT offers investors access to some of Japan’s highest-quality companies and is currently trading on a wider than usual discount of -17.8% versus the 12 month average of -12.6% (source: Bloomberg, as at 25 October 2022). The recent market downturn has enabled the team to purchase companies at reduced valuations whilst maintaining their style and focus on quality. We believe that this this approach means that AJIT is a good diversifier for those looking for Japanese exposure with a value and quality bias that makes use of the investment trust structure whilst also paying an attractive dividend.
To achieve long-term capital growth principally through investment in listed Japanese companies which are believed by the Investment Manager to have above average prospects for growth.
Interim results highlights – data to 30 September 2022
We are selectively working on opportunities, and resizing positions, to ensure that the Company’s holdings are resilient in this economic environment. We remain convinced that investment in companies with strong management with experience of varied economic cycles, robust balance sheets and companies with pricing power able to pass on increasing costs will deliver healthy returns over the medium to long term.
The Company’s NAV decreased by 7.5% in sterling total return terms over the period, while the benchmark Topix index fell 5.5%. Our stock choices underperformed the broader market over the period, due to concerns that rising inflation, and subsequently, higher interest rates would lower the profitability and longer-term growth outlook for our holdings. While these concerns are certainly headwinds for many businesses, the good management teams, strong market positions and resilient balance sheets of the Company’s holdings should allow them to navigate these difficult economic conditions. We continue to believe that our investment approach will outperform over a market cycle, especially in periods where company fundamentals are being rewarded. We recognise that our bottom-up approach may lead to periods of underperformance; however, our goal remains to deliver outperformance over the medium to long-term through adherence to our core investment principles.
Risk factors you should consider prior to investing:
- The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
- Past performance is not a guide to future returns.
- Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
- The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV.
- The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
- The Company may charge expenses to capital which may erode the capital value of the investment.
- Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss.
- Movements in exchange rates will impact on both the level of income received and the capital value of your investment.
- There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value.
- As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
- Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.
Other important information:
An investment trust should be considered only as part of a balanced portfolio. The information contained in this document should not be considered as an offer, solicitation or investment recommendation to deal in the shares of any securities or financial instruments. It is not intended for distribution or use by any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication or use would be prohibited. Nothing herein constitutes investment, legal, tax or other advice and is not to be relied upon in making an investment or other decision. No recommendation is made, positive or otherwise, regarding individual securities mentioned. This is not an invitation to subscribe for shares and is by way of information only. Subscriptions will only be received and shares issued on the basis of the current Key Information Document (KID). These can be obtained free of charge from Aberdeen Asset Managers Limited, PO Box 11020, Chelmsford, Essex, CM99 2DB or available on www.invtrusts.co.uk. Any data contained herein which is attributed to a third party (“Third Party Data”) is the property of (a) third party supplier(s) (the “Owner”) and is licensed for use by abrdn*. Third Party Data may not be copied or distributed. Third Party Data is provided “as is” and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none of the Owner, abrdn* or any other third party (including any third party involved in providing and/or compiling Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Neither the Owner nor any other third party sponsors, endorses or promotes the fund or product to which Third Party Data relates. * abrdn means the relevant member of abrdn group, being abrdn PLC together with its subsidiaries, subsidiary undertakings and associated companies (whether direct or indirect) from time to time. Issued by Aberdeen Asset Managers Limited, registered in Scotland (No. 108419), 10 Queen’s Terrace, Aberdeen AB10 1XL. Authorised and regulated by the Financial Conduct Authority in the UK.