TIDMBGFD
RNS Number : 5047T
Baillie Gifford Japan Trust PLC
21 March 2019
RNS Announcement
----------------
The Baillie Gifford Japan Trust PLC
===================================
Results for the six months to 28 February 2019
----------------------------------------------
Legal Entity Identifier: 54930037AGTKN765Y741
Regulated Information Classification: Interim Financial
Report.
The following is the unaudited Interim Financial Report for the
six months to 28 February 2019.
Chairman's Statement
Board Changes
Your Board is committed to high standards of corporate
governance. In particular, it recognises the need to have a balance
of skills, experience and length of service, all of which forms
part of our succession planning discussions during Nomination
Committee meetings. After serving 5 years as your Chairman, I will
be stepping down from the Board at the conclusion of the Annual
General Meeting of the Company to be held in December. The Board
has agreed that I will be replaced as Chairman by Keith Falconer
who has been a Director since 2014 and I am confident that the
Company will benefit from his stewardship. In turn, Keith will
relinquish his position as Chair of the Company's Audit Committee.
A replacement Audit Chair will be appointed in due course.
Management Fee
During the period, the Company announced a reduction in the
annual management fee payable to Baillie Gifford & Co Limited,
the Company's Managers and Secretaries. With effect from 1 January
2019 the Company's annual management fee will be calculated at
0.75% (was 0.95%) on the first GBP50 million of net assets, 0.65%
on the next GBP200 million of net assets and 0.55% on the
remainder.
Brexit
As a UK listed company, the Board and Managers have considered
the implications of Brexit. Around half of the Company's
investments are domestically focused within Japan and the remaining
holdings have minimal exposure to the UK. The Board is therefore
not concerned about the impact of Brexit on the portfolio.
Nick Bannerman
Chairman
20 March 2019
Interim Management Report
During the six months to the end of February 2019 the NAV of
your Company, after deducting borrowings at fair value, decreased
by 16.0% to 700.2p whilst the share price fell by 13.6%. The TOPIX
fell by 8.9% in sterling terms during the same period. This is
disappointing. However, we continue to believe that it is more
meaningful to consider performance over longer time horizons. Over
the past 3 years the NAV of your company is up by 64.4% and the
share price by 68.3%. The TOPIX rose by 40.4% in sterling terms
during the same period. This is encouraging. Herein we see one of
the challenges of equity investing in action. Strategies can
deliver good results over the long-term but that does not make them
immune to short-term challenges. To achieve a good long-term
outcome we need to be prepared to accept short-term volatility and
focus on actual investing - holding a portfolio of good companies
with attractive growth prospects for the long term.
During the last six months there have been various signs of a
global slowdown. At this stage both the depth and duration remain
unclear. When we have met with management in the manufacturing
sector the general indication is that there has not yet been a
rebound.
The three largest individual stock detractors to performance
were the holdings in Cyberagent (internet advertising and content),
Outsourcing (employment placement service) and Zozo (internet
fashion retail, formerly named Start Today). These had individual
negative attributions of between -0.9% and -1.3% over the six-month
period. These are all dynamic businesses led by founders with large
personal stakes in the businesses and that have managed to deliver
good long term growth rates. Interestingly, when we take a step
back and look at how these shares have contributed to the portfolio
over the longer term the outcomes are much more positive Compared
with acquisition cost the shares in Cyberagent are 76% higher,
those in Outsourcing 181% higher, and those in Zozo are 247% higher
in local currency terms. We continue to hold the shares and have
conviction that backing such opportunities will deliver good
results over the longer-term. During the six-month period no stock
added more than +1.0% to performance. The largest positive
attributions were Pan-Pacific holdings (discount store chain,
formerly named Don Quijote) at +0.7% and H.I.S. (discount travel
agency and theme parks) at +0.5%.
The Company retains a prudent level of net gearing of around 12%
at the time of writing. This allows us to benefit from the
long-term effects of investing in good quality businesses using
low-cost debt but with little risk of feeling pressured to sell
should share prices weaken in the short-term. However, the gearing
was unhelpful in the six-month period, contributing -1.7%, as is
typical when the market is weaker in local currency terms.
Over the period we bought three new holdings and sold five
holdings. Turnover remained low in line with our long-term time
horizon. Two of the new holdings, Gree and Mixi, create and operate
games for mobile phones. In each case the company has experienced a
growth setback, but the market has, in our view, over-reacted with
the result that at least two-thirds of the value of each company is
covered by the net cash position on the balance sheet. This seems
very strange to us given that these are entrepreneurial companies
operating with an increasing market opportunity. DMG Mori is a
machine tool manufacturer where the size of the business has been
transformed by its acquisition of German machine tool manufacturer
Gildermeister. As the integration continues to progress we expect
significant growth in profits. Of the holdings sold, Pigeon and
Iriso Electronics are both cases where the company has shown good
growth in earnings and share price, but we think it will be
difficult for margins to expand further and therefore it will be
difficult for growth rates to match the past. Toyo Tire, Sanbio and
Renesas are cases where we changed our view on the fundamental
attraction of the business. Sanbio, a stem cell company, had a
major trial failure and we believe the path to a successful future
is now significantly more complicated, while the managements of
both Toyo Tire and Renesas acted in ways that we do not believe are
aligned to the interests of long-term shareholders.
We continue to be excited about the opportunities for growth
stock-picking in Japan and believe that a well-executed strategy
delivers results. When we consider the strengths of the businesses
held in the portfolio we remain optimistic about the future.
Past performance is not a guide to future performance
Total return information sourced from Refinitiv/Baillie Gifford.
See disclaimer at end of this document.
See Glossary of Terms and Alternative Performance Measures in
Note 13.
Responsibility statement
========================
We confirm that to the best of our knowledge:
a) the condensed set of Financial Statements has been prepared
in accordance with FRS 104 'Interim Financial Reporting';
b) the Interim Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule
4.2.7R (being an indication of important events that have occurred
during the first six months of the financial year, their impact on
the condensed set of Financial Statements and a description of the
principal risks and uncertainties for the remaining six months of
the year); and
c) the Interim Financial Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule
4.2.8R (disclosure of related party transactions and changes
therein).
On behalf of the Board
Nick AC Bannerman
Chairman
20 March 2019
Equity Portfolio by Growth Category as at 28 February 2019
Secular Growth Special
Growth %* Stalwarts %* Situations %* Cyclical Growth %*
================== ====== ==================== ===== =============== ===== ================== =====
Rakuten 3.2 Zenkoku Hosho 1.4 SoftBank 6.4 Itochu 2.0
Sumitomo Mitsui
SBI 3.0 Nitori 1.3 Sony 2.2 Trust 1.8
Sumitomo Metal
Inpex 2.5 Park24 1.2 Tokyo Tatemono 1.3 Mining 1.8
Misumi 2.4 Fukuoka Financial 0.8 Colopl 1.3 Nifco 1.5
Mitsubishi UFJ Mitsubishi
Kubota 2.4 Lease & Finance 0.7 JAFCO 0.8 Electric 1.5
GMO Internet 2.4 Asics 0.6 Gree 0.7 Murata 1.5
Fanuc 2.3 Sawai Pharmaceutical 0.6 Mixi 0.6 Disco 1.3
Sysmex 2.2 Secom 0.6 Advantest 1.2
H.I.S. 2.1 Iida Group 1.2
Invincible
Recruit Holdings 2.1 Investment 1.0
M3 2.1 Persol Holdings 1.0
Outsourcing 2.0 DMG Mori 0.9
Yaskawa Electric 2.0 Mazda Motor 0.7
Nidec 1.9 Katitas 0.6
SMC 1.8 Isuzu Motors 0.4
Shimadzu 1.8
Pan Pacific
International
Holdings 1.7
CyberAgent 1.7
ZOZO 1.7
Sato Holdings 1.6
Topcon 1.3
MonotaRO 1.2
Toyota Tsusho 1.1
Istyle 1.1
Subaru 1.0
Infomart 0.9
Broadleaf 0.9
Digital Garage 0.9
Peptidream 0.9
Lifull 0.7
Keyence 0.7
Mercari 0.6
Nippon Ceramic 0.5
Noritsu Koki 0.5
Shimano 0.5
Rizap 0.3
Cyberdyne 0.3
Healios K.K. 0.3
Total 56.6 Total 7.2 Total 13.3 Total 18.4
================== ====== ===================== ==== =============== ===== ================== =====
* Percentage of total assets
A definition of growth categories can be found in the Managers'
Report on page 10 of the Annual Report and Financial Statements at
31 December 2018.
See Glossary of Terms and Alternatie Performance Measures in
Note 13.
Twenty Largest Holdings at 28 February 2019 (unaudited)
=======================================================
Value % of total
Name Business GBP'000 assets*
====================== ================================================ ======== ==========
SoftBank Telecom operator and technology investor 48,287 6.4
Rakuten Internet retail and financial services 24,015 3.2
SBI Online financial services 23,041 3.0
Inpex Oil and gas producer 18,995 2.5
Misumi Online distributor of precision machinery parts 18,459 2.4
Kubota Agricultural machinery 18,248 2.4
GMO Internet Internet conglomerate 17,833 2.4
Fanuc Robotics manufacturer 17,112 2.3
Sysmex Medical testing equipment 16,550 2.2
Sony Consumer electronics, films and finance 16,521 2.2
H.I.S. Discount travel agency and theme parks 16,261 2.1
Reruit Holdings Property, lifestyle and HR media 16,221 2.1
M3 Online medical services 15,834 2.1
Itochu General trading firm 15,181 2.0
Outsourcing Employment placement services 15,087 2.0
Yaskawa Electric Specialist factory automation 14,884 2.0
Nidec Specialist motors 14,579 1.9
Sumitomo Mitsui Trust Japanese trust bank and investment manager 13,748 1.8
SMC Producer of factory automation equipment 13,556 1.8
Shimadzu Precision tools and equipment maker 13,533 1.8
====================== ================================================ ======== ==========
Total 367,945 48.6
======================================================================== ======== ==========
(*) See Glossary of Terms and Alternative Performance Measures
in Note 13.
Income Statement (unaudited)
============================
For the six months ended For the six months ended
28 February 2019 28 February 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================================== =========== =========== ============ ========= ========= ========
Gains on sales of investments - 31,470 31,470 - 26,651 26,651
Movement in investment holding gains - (157,356) (157,356) - 74,391 74,391
Currency gains - 2,173 2,173 - 2,046 2,046
Income from investments and interest
receivable 6,096 - 6,096 4,908 - 4,908
Investment management fee (2,035) - (2,035) (2,097) - (2,097)
Other administrative expenses (309) - (309) (305) - (305)
============================================== =========== =========== ============ ========= ========= ========
Net return before finance costs and taxation 3,752 (123,713) (119,961) 2,506 103,088 105,594
============================================== =========== =========== ============ ========= ========= ========
Finance costs of borrowings (1,190) - (1,190) (1,238) - (1,238)
============================================== =========== =========== ============ ========= ========= ========
Net return on ordinary activities before
taxation 2,562 (123,713) (121,151) 1,268 103,088 104,356
============================================== =========== =========== ============ ========= ========= ========
Tax on ordinary activities (610) - (610) (490) - (490)
============================================== =========== =========== ============ ========= ========= ========
Net return on ordinary activities after
taxation 1,952 (123,713) (121,761) 778 103,088 103,866
============================================== =========== =========== ============ ========= ========= ========
Net return per ordinary share (note 5) 2.14p (135.32p) (133.18p) 0.90p 119.32p 120.22p
============================================== =========== =========== ============ ========= ========= ========
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
columns are prepared under guidance published by the Association of
Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as all gains
and losses of the Company have been reflected in the above
statement.
Balance Sheet (unaudited)
=========================
At 28 February 2019 At 31 August 2018
GBP'000 GBP'000
Fixed assets
Investments held at fair value through profit or loss (note 6) 723,155 842,045
=============================================================== =================== =================
Current assets
Debtors 2,148 4,700
Cash and cash equivalents 34,077 27,788
=============================================================== =================== =================
36,225 32,488
=============================================================== =================== =================
Creditors
Amounts falling due within one year (1,951) (3,943)
Net current assets 34,274 28,545
=============================================================== =================== =================
Total assets less current liabilities 757,429 870,590
=============================================================== =================== =================
Creditors
Amounts falling due after more than one year:
Bank loans (note 7) (111,436) (114,486)
=============================================================== =================== =================
Net assets 645,993 756,104
=============================================================== =================== =================
Capital and reserves
Share capital 4,600 4,523
Share premium 187,577 175,455
Capital redemption reserve 203 203
Capital reserve 451,735 575,448
Revenue reserve 1,878 475
=============================================================== =================== =================
Shareholders' funds 645,993 756,104
=============================================================== =================== =================
Net asset value per ordinary share* 702.2p 835.8p
=============================================================== =================== =================
Ordinary shares in issue (note 8) 91,999,925 90,459,925
=============================================================== =================== =================
*See Glossary of Terms and Alternative Performance Measures at
the end of this document.
Statement of Changes in Equity (unaudited)
==========================================
For the six months ended 28 February 2019
Share Capital redemption Capital Shareholders'
capital Share premium reserve reserve* Revenue reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================== ======== ============= ======================== ========= =============== =============
Shareholders' funds at 1
September 2018 4,523 175,455 203 575,448 475 756,104
Shares Issued 77 12,122 - - - 12,199
Net return on ordinary
activities after
taxation - - - (123,713) 1,952 (121,761)
Dividends paid during
the year (note 4) - - - - (549) (549)
Shareholders' funds at
28 February 2019 4,600 187,577 203 451,735 1,878 645,993
======================== ======== ============= ======================== ========= =============== =============
For the six months ended 28 February 2018
Share Capital redemption Capital Shareholders'
capital Share premium reserve reserve* Revenue reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================== ======== ============= ======================== ========= =============== =============
Shareholders' funds at 1
September 2017 4,194 122,698 203 449,885 (1,759) 575,221
Shares Issued 264 42,026 - - - 42,290
Net return on ordinary
activities after
taxation - - - 103,088 778 103,866
Shareholders' funds at
28 February 2018 4,458 164,724 203 552,973 (981) 721,377
======================== ======== ============= ======================== ========= =============== =============
* The Capital Reserve balance as at 28 February 2019 includes
investment holding gains on investments of GBP236,297,000 (28
February 2018 - gains of GBP409,233,000).
Condensed Cash Flow Statement (unaudited)
=========================================
Six months to Six months to
28 February 2019 28 February 2018
GBP'000 GBP'000
Cash flows from operating activities
Net return on ordinary activities before taxation (121,151) 104,356
Net losses/(gains) on investments 125,886 (101,042)
Currency gains (2,173) (2,046)
Finance costs of borrowings 1,190 1,238
Overseas withholding tax (563) (427)
Changes in debtors and creditors (737) (2,178)
==================================================== ================= =================
Cash from operations 2,452 (99)
Interest paid (1,220) (1,027)
==================================================== ================= =================
Net cash inflow/(outflow) from operating activities 1,232 (1,126)
==================================================== ================= =================
Cash flows from investing activities
Acquisitions of investments (70,505) (117,343)
Disposals of investments 64,789 47,249
Exchange differences (209) 269
==================================================== ================= =================
Net cash outflow from investing activities (5,925) (69,825)
==================================================== ================= =================
Shares issued 12,199 42,290
Equity dividends paid (549) -
Bank loans drawn down - 62,873
Bank loans repaid - (20,045)
Net cash inflow from financing activities 11,650 85,118
==================================================== ================= =================
Increase in cash and cash equivalents 6,957 14,167
Exchange movements (668) (1,122)
Cash and cash equivalents at 1 September 27,788 10,585
Cash and cash equivalents at 28 February* 34,077 23,630
==================================================== ================= =================
* Cash and cash equivalents represent cash at bank and short
term money market deposits repayable on demand.
Notes to the Condensed Financial Statements (unaudited)
=======================================================
1. The condensed Financial Statements for the six months to 28 February 2019 comprise the statements
set out on the previous pages together with the related notes below. They have been prepared
in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended
Practice issued in November 2014, updated in February 2018 with consequential amendments and
have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board
Guidance on 'Review of Interim Financial Information'. The Financial Statements for the six
months to 28 February 2019 have been prepared on the basis of the same accounting policies
as set out in the Company's Annual Report and Financial Statements at 31 August 2018.
Going Concern
Having considered the Company's principal risks and uncertainties, as set out in the inside
front cover, together with its current position, investment objective and policy, its assets
and liabilities, and projected income and expenditure, it is the Directors' opinion that the
Company has adequate resources to continue in operational existence for the foreseeable future.
The Company's assets, the majority of which are investments in quoted securities which are
readily realisable, exceed its liabilities significantly. All borrowings require the prior
approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed
by the Board on a regular basis. In accordance with the Company's Articles of Association,
shareholders have the right to vote annually at the Annual General Meeting on whether to continue
the Company. The next continuation vote will be in December 2019. The Directors have no reason
to believe that the continuation resolution will not be passed at the Annual General Meeting.
Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting
in preparing these Financial Statements and confirm that they are not aware of any material
uncertainties which may affect the Company's ability to continue to do so over a period of
at least twelve months from the date of approval of these Financial Statements.
2. The financial information contained within this Interim Financial Report does not constitute
statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial
information for the year ended 31 August 2018 has been extracted from the statutory accounts
which have been filed with the Registrar of Companies. The Auditor's Report on those accounts
was not qualified, did not include a reference to any matters to which the Auditor drew attention
by way of emphasis without qualifying its report and did not contain statements under sections
498(2) or (3) of the Companies Act 2006.
3. Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been
appointed by the Company as its Alternative Investment Fund Manager and Company Secretary.
The investment management function has been delegated to Baillie Gifford & Co. The management
agreement can be terminated on not less than 6 months' notice, or on shorter notice in certain
circumstances. With effect from 1 January 2019, the annual management fee is 0.75% on the
first GBP50 million of net assets, 0.65% on the next GBP200 million of net assets and 0.55%
on the remaining net assets, calculated and payable quarterly. Prior to 1 January 2019, the
annual management fee was 0.95% on the first GBP50 million of net assets, 0.65% on the next
GBP200 million of net assets and 0.55% the remaining net assets, calculated and payable quarterly.
Six months to Six months to
28 February 2019 28 February 2018
GBP'000 GBP'000
======================================================================== ================= =================
4. Dividends
Amounts recognised as distribution in the period:
Previous year's final dividend of 0.60p (2018: nil), paid 14 December
2018 549 -
------------------------------------------------------------------------- ----------------- -----------------
549 -
============================================================================ ================= =================
No interim dividend will be declared.
Notes to the condensed financial statements (unaudited) (continued)
===================================================================
5. Net return per ordinary share Six months to Six months to
28 February 2019 28 February 2018
GBP'000 GBP'000
=============================================================== ==================== ===================
Revenue return on ordinary activities after taxation 1,952 778
Capital return on ordinary activities after taxation (123,713) 103,088
================================================================ === ==================== ===================
Net return per ordinary share is based on the above totals of revenue and capital and on 91,423,682
ordinary shares (28 February 2018 - 86,399,787), being the weighted average number of ordinary
shares in issue during each period. There are no dilutive or potentially dilutive shares in
issue.
6. Fair Value
The fair value hierarchy used to analyse the basis on which the fair values of financial instruments
held at fair value through the profit or loss account are measured is described below. Fair
value measurements are categorised on the basis of the lowest level input that is significant
to the fair value measurement.
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly
or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
The fair value of listed investments is the last traded price which is equivalent to the bid
price on Japanese markets.
The financial assets designated as valued at fair value through profit or loss are all categorised
as Level 1 in the above hierarchy. None of the financial liabilities are designated at fair
value through profit or loss in the Financial Statements.
All of the Company's investments fall into Level 1 for the periods reported.
7. Bank loans of GBP111.4million (Yen16.5billion) have been drawn down under yen loan facilities
which are repayable between August 2020 and November 2024 (31 August 2018 - GBP114.5million
(Yen16.5billion)).
8. The Company has the authority to issue shares/sell treasury shares at a premium to net asset
value as well as to buy back shares at a discount to net asset value. During the period, 1,540,000
shares (28 February 2018 - 5,275,000) were issued at a premium to net asset value raising
net proceeds of GBP12,199,000 (28 February 2018 - GBP42,290,043).
9. Transaction costs incurred on the purchase and sale of the investments are added to the purchase
cost or deducted from the sales proceeds, as appropriate. During the period, transaction costs
on purchases amounted to GBP35,000 (28 February 2018 - GBP54,000) and transaction costs on
sales amounted to GBP37,000 (28 February 2018 - GBP29,000)
10. Related Party Transactions
There have been no transactions with related parties during the first six months of the current
financial year that have materially affected the financial position or the performance of
the Company during that period and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that could have had such an effect
on the Company during that period
Notes to the condensed financial statements (unaudited)
(continued)
11. Principal Risks and Uncertainties
The principal risks facing the Company are financial risk, investment strategy risk, discount
risk, regulatory risk, custody and depositary risk, smaller company risk, operational risk,
leverage risk and political risk. An explanation of these risks and how they are managed is
set out on page 8 of the Company's Annual Report and Financial Statements for the year to
31 August 2018 and is available on the Company's website www.japantrustplc.co.uk . The principal
risks and uncertainties have not changed since the date of that report.
12. The Interim Financial Report is available at www.japantrustplc.co.uk and will be posted to
shareholders on or around 5 April 2019.
13. Glossary of Terms and Alternative Performance Measures (APM)
Total Assets
Total assets less current liabilities, before deduction of all borrowings.
Net Asset Value
Net Asset value (NAV) is the value of total assets less liabilities (including borrowings).
The NAV per share is calculated by dividing this amount by the number of ordinary shares in
issue.
Net Asset Value (Borrowings at Fair Value) (APM)
Borrowings are valued at an estimate of their market worth.
Net Asset Value (Borrowings at Par Value)
Borrowings are valued at their nominal par value. The Company's yen denominated loans are
valued at its sterling equivalent. Par value approximates amortised cost.
Net Asset Value (Reconciliation of NAV at Par to NAV at Fair)
28 February 2019 31 August 2018
GBP'000 GBP'000
==================================== ================= ===============
Shareholders' funds (borrowings
at par value) 645,993 756,104
Add: par value of borrowings 111,436 114,486
Less: fair value of borrowings (113,250) (116,111)
==================================== ================= ===============
Shareholders' funds (borrowings
at fair value) 644,179 754,479
==================================== ================= ===============
Shares in issue 91,999,925 90,459,925
==================================== ================= ===============
Net Asset Value per ordinary share
(borrowings at fair value) 700.2p 834.0p
==================================== ================= ===============
Net Liquid Assets
Net liquid assets comprise current assets less current liabilities, excluding borrowings.
Discount/Premium/ (APM)
As stockmarkets and share prices vary, an investment trust's share price is rarely the same
as its NAV. When the share price is lower than the NAV per share it is said to be trading
at a discount. The size of the discount is calculated by subtracting the share price from
the NAV per share and is usually expressed as a percentage of the NAV per share. If the share
price is higher than the NAV per share, this situation is called a premium.
Total Return (APM)
The total return is the return to shareholders after reinvesting the net dividend on the date
that the share price goes ex-dividend.
13. Glossary of Terms and Alternative Performance Measures (APM) (Continued)
Ongoing Charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a percentage of
the average net asset value (with borrowings at fair value). The ongoing charges have been
calculated on the basis prescribed by the Association of Investment Companies.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an investment trust
can borrow money to invest in additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the
shareholders' assets grow proportionately more because the debt remains the same. But if the
value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance
performance in rising markets but can adversely impact performance in falling markets.
Gearing is the Company's borrowings at par less cash and cash equivalents expressed as a percentage
of shareholders' funds.
Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds.
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers (AIFM) Directive, leverage is
any method which increases the Company's exposure, including the borrowing of cash and the
use of derivatives. It is expressed as a ratio between the Company's exposure and its net
asset value and can be calculated on a gross and a commitment method. Under the gross method,
exposure represents the sum of the Company's positions after the deduction of sterling cash
balances, without taking into account any hedging and netting arrangements. Under the commitment
method, exposure is calculated without the deduction of sterling cash balances and after certain
hedging and netting positions are offset against each other.
Active Share (APM)
Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio
that differs from its comparative index. It is calculated by deducting from 100 the percentage
of the portfolio that overlaps with the comparative index. An active share of 100 indicates
no overlap with the index and an active share of zero indicates a portfolio that tracks the
index.
The Baillie Gifford Japan Trust aims to achieve long term
capital growth principally through investment in medium and smaller
sized Japanese companies which are believed to have above average
prospects for growth, although it invests in larger companies when
considered appropriate. At 28 February 2019, the Company had total
assets of GBP757.4m (before deduction of bank loans of
GBP111.4m).
The Company is managed by Baillie Gifford, an Edinburgh based
fund management group with around GBP190bn under management and
advice as at 20 March 2019.
Past performance is not a guide to future performance. The value
of an investment and any income from it is not guaranteed and may
go down as well as up and investors may not get back the amount
invested. This is because the share price is determined by the
changing conditions in the relevant stock markets in which the
Company invests and by the supply and demand for the Company's
shares. You should view your investment as long term. You can find
up to date performance information about The Baillie Gifford Japan
Trust PLC on the Company website at www.japantrustplc.co.uk.
20 March 2019
For further information please contact:
Alex Blake, Baillie Gifford & Co
Tel: 0131 275 2859
Roland Cross, Director
Four Broadgate
Tel: 0203 697 4200 or 07831 401 309
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
Neither the contents of the Managers' website nor the contents
of any website accessible from hyperlinks on the Managers' website
(or any other website) is incorporated into, or forms part of, this
announcement.
Third Party Data Provider Disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data. No Provider shall in any way be liable
to any recipient of the data for any inaccuracies, errors or
omissions in the index data included in this document, regardless
of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the
data or to otherwise notify a recipient thereof in the event that
any matter stated herein changes or subsequently becomes
inaccurate.
Without limiting the foregoing, no Provider shall have any
liability whatsoever to you, whether in contract (including under
an indemnity), in tort (including negligence), under a warranty,
under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgments, or any other conclusions, or
any course of action determined, by you or any third party, whether
or not based on the content, information or materials contained
herein.
- Ends -
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BRGDXUXDBGCG
(END) Dow Jones Newswires
March 21, 2019 03:00 ET (07:00 GMT)
Baillie Gifford Japan (LSE:BGFD)
Historical Stock Chart
From Apr 2024 to May 2024
Baillie Gifford Japan (LSE:BGFD)
Historical Stock Chart
From May 2023 to May 2024