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You can find growth stocks in the 'New Japan'
John MacDougall, manager of the Baillie Gifford Shin Nippon (New Japan) investment trust, talks about two stocks he says contradict investors' negative views of the country.
Baillie Gifford Shin Nippon is the best performing investment trust in the Japanese Smaller Companies sector. Over five years shares in the £70 million fund have generated a total return of over 47%, rising to 154% over 10 years.
Fund manager John MacDougall says investors's negative views of Japan are understandable after years of stock market declines and an economy stuck in deflation. However, he says the smaller, younger companies he invests in, such as MonotaRO and Harmonic Drive Systems, represent a more dynamic and entrepreneurial side that is rarely recognised in the West.
MacDougall's commments in this video come at an interesting time for UK funds investing in Japan. The country's new Liberal Democratic government is pushing for a much looser monetary policy in order to drive down the value of its currency, the yen, and boost exporters. The country's stock market, as measured by the Topix index, responded with a 5% rise in December. Many funds have bounced back much faster. Shares in Shin Nippon have shed the small discount at which they usually trade in response and moved to a 4% premium to net asset value.
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by Gavin Lumsden on Jul 25, 2016 at 00:01