Baillie Gifford Shin Nippon is an investment trust with a primary goal to seek long-term capital growth by investing in small Japanese companies that are thought to have above average capital growth prospects. The company invests in 40 – 80 smaller companies that have attractive valuations and have good growth potential.
The trust’s equity team targets companies in the Japan stock market with innovative business models and firms that have the ability to challenge traditional Japanese practices and have a potential for overseas growth. The team has particular interest in Japan’s developing services economy, which is rapidly expanding due to government deregulation and business outsourcing, as well as technology and healthcare. When selecting the targeted company, the team has a three- to five-year outlook.
The trust is actively managed and will largely invest in publicly traded firms, while up to 10% of total assets can be invested in unlisted ventures at the time of initial commitment. Growth could come from new business models that threaten established Japanese norms, or from new market opportunities, such as international expansion. The Trust is managed by looking at the underlying investments, rather than the comparison index, the MSCI Japan Small Cap Index and total return.
The trust covers a wide range of sectors from industrials, information technology and consumer discretionary, to real estate and financials. As of 31 December 2021, the trust had total assets of £777.49m ($1.06bn).
The trust is listed on the London Stock Exchange and became part of the FTSE 250 Index in November 2020.
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