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Baillie Gifford creates sterling class for Japanese fund

Baillie Gifford creates sterling class for Japanese fund

Baillie Gifford has created a sterling hedged share class for its Worldwide Japanese fund to help investors avoid the fluctations in the rate of yen versus sterling.

The £147m fund, run by Donald Farquharson and Sarah Whitley, has outperformed the benchmark Topix index since its inception in 2009 with its unhedged share class.

However, the group wants to be able to provide investors with the option of hedging out currency fluctuations.

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With aggressive monetary policy in Japan, it is likely the yen will weaken against sterling, meaning profits registered in yen will need to be higher when converted into sterling. A hedged share class removes this fluctuation.

James Budden, director of retail marketing and distribution at Baillie Gifford said: “As Japan engages in a process of structural reform and with companies announcing record profits, this new share class provides investors with access to our proven expertise while militating against fluctuations in the price of the yen versus sterling.”