Baillie Gifford Japan doubles down on AI as NAV edges upwards
Baillie Gifford Japan Trust PLC on Friday said it anticipates portfolio resilience to US tariffs as it reported a narrowing of its share price discount to net asset value.
The trust, managed by Edinburgh, Scotland-based Baillie Gifford, invests for long-term capital growth mostly in medium to smaller sized Japanese companies.
For the six months ended February 28, the trust realised NAV per share returns of 1.5% and share price gains of 2.9%, while the Topix, or Tokyo Stock Price Index, achieved a total return of 0.9% in sterling terms.
NAV per share at the end of February was up 0.2% at 856.9p from 855.0p at the end of August, with the firm’s share price gaining 1.9%. It’s discount to NAV narrowed to 10.5% from 11.5% over this period.
Shares in the trust were down 1.2% at 753.00p on Friday morning in London.
The trust maintained its gearing level of 20% owing to the ‘the highly attractive investment opportunities available’.
Baillie Gifford Japan said that while the interim performance appears subdued in investment terms, beneath the surface, ‘action has continued apace’.
The trust added that it maintains the view that artificial intelligence is a radically disruptive technology reshaping the competitive environment, with it emphasising its exposure to the sector.
Management said: ‘With much changing in the world we believe that investors in Japan will be well-served by sticking to the core investment principle of focusing on companies with sound prospects for sales and earnings growth. Your company maintains significant exposure to the long-term secular trends of digitalisation, automation and AI.
‘Furthermore, given that the portfolio currently owns no car manufacturers and has a more domestic orientation than the wider Japanese stock market we believe that it will be relatively resilient to tariffs imposed by the USA.’
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