Baillie Gifford Japanese
One of the oldest Japan funds in the sector, Baillie Gifford Japanese takes a high-conviction, growth-focused approach to investing in Japanese equities. The fund seeks to identify exceptional businesses capable of delivering sustained earnings growth over the long term. Rather than following the benchmark, the managers build a concentrated portfolio of companies they believe can become tomorrow's industry leaders, supported by extensive fundamental research and a patient investment approach.
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Our Opinion
Baillie Gifford Japanese fund has a very strong Japanese equity team. This is a well-managed portfolio with a clear investment strategy, which offers complementary exposure to those funds that are focused more on the value of a company rather than its growth prospects. We believe it makes a compelling option for investors seeking long-term exposure to high-quality Japanese growth companies.
Fund Managers
Matthew Brett, Lead Manager
Matthew is an investment manager in the Japanese Equities Team at Baillie Gifford, where he has worked since 2003 and became a partner in 2018. He manages the Japanese Fund and related All Cap Strategy segregated accounts, the Baillie Gifford Japan Trust, and co-manages the Japanese Income Growth Fund. Matthew graduated with a BA (Hons) in Natural Sciences (Psychology) from the University of Cambridge in 2000 and holds a PhD in Psychology from the University of Bristol.
Jared Anderson, Fund manager
Jared is an investment manager in the Japanese Equities Team. He is co-manager of the Japanese All Cap Strategy and joined Baillie Gifford in 2016. Prior to joining the team, he worked in the Global Alpha, UK Equities and Fixed Income teams. Before he joined Baillie Gifford he spent two years as an Assistant Economist at the Scottish Government. Jared graduated MA (Hons) in Economics from the University of Edinburgh in 2012.
Risk
Investing in Japan can be volatile, although its stock market movements are often less correlated to developed equity markets, so can act as a diversifier. The emphasis on structural change within the portfolio should benefit from the government’s current economic strategy. The process seeks out growth-orientated companies, which can underperform should this style of investing fall out of favour.
Company Description
Founded in 1908 and employee-owned, Baillie Gifford is based in Edinburgh but has offices in London and New York. Awarded the Elite Provider for Equities Rating each year from 2015 to 2021, it specialises globally in equities, fixed income and multi-asset portfolios. The firm is owned by its senior executives and operates as a partnership.
Talking Factsheet
Baillie Gifford JapaneseSarah Clark
Quote from the Fund Manager
We are growth-orientated, stock-picking managers.
Matthew BrettLead Manager
Matthew BrettInvestment process
The managers take a long-term, bottom-up approach, focusing on identifying high-quality Japanese companies with the potential to deliver strong growth over many years. Rather than trying to predict economic or market movements, they believe the best investment opportunities come from selecting individual businesses with attractive long-term prospects.
Research is at the heart of the investment process. Ideas are generated from company meetings, industry events, investment trips and Baillie Gifford's global research network. The team maintains a watchlist of around 350 companies before carrying out more detailed analysis on a smaller group of businesses that demonstrate attractive characteristics.
Investment decisions are made collaboratively, with analysts presenting ideas and challenging each other's views before a company is added to the portfolio. The result is a relatively concentrated portfolio of the managers' highest-conviction ideas, typically between 45-65 companies, with position sizes reflecting their confidence in each business.
The managers invest with a long-term mindset and typically hold companies for many years, allowing successful businesses time to grow and compound in value. Team members also visit Japan regularly to meet company management teams, helping them better understand businesses, assess leadership quality and identify emerging opportunities.
Risk
Investing in Japan can be volatile, although its stock market movements are often less correlated to developed equity markets, so can act as a diversifier. The emphasis on structural change within the portfolio should benefit from the government’s current economic strategy. The process seeks out growth-orientated companies, which can underperform should this style of investing fall out of favour.
ESG
ESG - Limited
With this fund, Matthew takes a long-term approach, looking for growth opportunities with firms that are likely to be future leaders. He believes that this long-term approach incorporates a natural bias towards sustainable business models, however this is not a formal policy of the philosophy or process. Material ESG issues that are identified in the analysis will be considered as possible reasons to not invest, but this will be on a case-by-case basis, rather than a systematic approach. There is a strong focus on governance though, with Matthew and the team having regular engagement with the management of companies already held in the fund and those of prospective holdings.
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