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Baillie Gifford Japanese
One of the oldest Japan funds in the sector, Baillie Gifford Japanese has delivered outstanding returns in the most difficult market conditions. The fund is managed by a large team, based in Edinburgh, and invests in growing Japanese businesses that deliver consistently strong returns to shareholders.
Our opinion
Baillie Gifford 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. Baillie Gifford Japanese has been one of the most consistent funds in its sector and has proven itself in many different market environments.
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 2019, it specialises globally in equities, fixed income and multi-asset portfolios. The firm is owned by 44 of its senior executives and operates as a partnership.
Fund manager
The investment manager of the Baillie Gifford Japanese fund is Matthew Brett. Having co-managed the fund since November 2007, he took the lead role in May 2018. Matthew joined Baillie Gifford in 2003 after achieving a BA in Natural Sciences from the University of Cambridge and a PhD in Psychology from Bristol University. Matthew has the support of the Japanese equities team which is responsible for researching companies and generating new ideas.
We are growth-orientated, stock-picking managers.
Matthew BrettFund manager
Investment process
Baillie Gifford Japanese seeks to invest in well-managed businesses with a strong competitive advantage that are not overpriced. The research process is designed to ensure the best ideas of each individual team member are included in the portfolio. It is built around five specific factors: a company’s competitive advantage, industry, financial strength, how well it is run and its valuation. These are discussed amongst the team with Matthew having the final say on what is added to the portfolio. Being growth investors, the team have a natural bias towards medium-sized companies.
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.
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