Investments  

Baillie Gifford Shin Nippon NAV up 12%

Baillie Gifford Shin Nippon NAV up 12%

The Baillie Gifford Shin Nippon investment trust has recorded an 11.7 per cent increase in its net asset value (NAV) per share for the 12 months to January 31 2015.

In the final results statement the board of the Japanese smaller companies trust acknowledged this was slightly behind the MSCI Japan Small Cap index, which rose 13.2 per cent in the same period. Over a three year time frame, however, the results stated the NAV per share increased 95.3 per cent compared with a 37.3 per cent increase in the comparative index.

Barry Rose, chairman of the trust’s board, noted in his statement that the share price of the trust was “weak during the year”, recording a fall of 2.1 per cent as it moved from a premium at the start of the financial year before moving to a discount of 6.6 per cent.

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At the annual general meeting the trust will be seeking authority to issue new shares of up to 10 per cent of the company’s share capital at a premium to NAV, while it will also be seeking approval to renew the ability to buy back shares “if the discount to NAV is substantial in absolute terms, or in relation to its peers”.

In the 12 month period the trust, which is managed by John MacDougall, saw its net assets increase from £113.96m to £128.64m, while the NAV per share (after deducting borrowings at fair value) increased from 307.08p to 343.7p as of January 31 2015.

In the manager’s statement Baillie Gifford noted the biotech industry has significant growth potential in Japan, and as a result it has purchased two new holdings in this area over the year – Peptidream and NanoCarrier.

In terms of performance the managers acknowledged that Japanese stocks have been buoyed by the re-election of Mr Abe and improving corporate governance in the country, and among the contributors to performance were holdings with strong overseas businesses such as Asics.

However, it added that performance from some of the earlier stage internet related businesses “has been disappointing”.

But the managers added: “The start-up community remains vibrant, while increased efforts to make the Japanese stockmarket a more attractive place to invest are encouraging. The recent broadening out into new sectors of the range of businesses that meet Shin Nippon’s investment criteria is a welcome and healthy development for the long term.”