Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Finding growth stocks in 'New Japan'

Baillie Gifford Shin Nippon is the best performing investment trust in the Japanese Smaller Companies sector, and over five years shares in the £70 million fund have generated a total return of more than 47%.

These retutns rise to 154% when the numbers are crunched over 10 years.

Despite these resultts, Japan has been a difficult place to invest in recent years, and 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 ambition 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.

Moreover, the country's stock market, as measured by the Topix index, responded positively 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.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

John MacDougall
John MacDougall
1/7 in Equity - Japanese Small & Medium Companies (Performance over 3 years) Average Total Return: 65.51%
Citywire TV
Play Commodity conundrum, beleaguered bonds and a US dilemma

Commodity conundrum, beleaguered bonds and a US dilemma

This week’s episode of Investment Pulse looks at the impact of falling commodity prices on banks, dangers of negative yield curves and whether US equities can continue to deliver.

Play Mirabaud's Pyshkin: The US will continue to grow dividends

Mirabaud's Pyshkin: The US will continue to grow dividends

The global equity income manager has invested half of his fund here.

Play Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Wealth Manager on Twitter