The Baillie Gifford Japan Trust saw its net asset value (NAV) per share increase 20.5 per cent in the six months to February 28 2015, versus a 12.3 per cent increase in the Topix Total Return index.
The investment trust, which invests in small and mid-cap Japanese companies, attributed its outperformance in the period to stock selection and the effect of gearing.
The company included a figure on the active share of the portfolio for the first time in its half-yearly report, as it acknowledged there had been “a significant amount of discussion” in the financial press about the need for “true active management of portfolios rather than any mimicking of indices”.
It stated that the Japan Trust’s 87 per cent active share showed that the overlap with the index was “very small” and that “an investment approach which emphasises the individual merits of companies is being taken”.
At the end of February this year, the investment trust had total assets of £347m, while its share price climbed by 20.6 per cent.
The report highlighted the recovery of the Japanese economy from the effects of the consumption tax increase and acknowledged improvements in corporate governance in Japan.
It said: “Company behaviour is clearly changing, with more emphasis on increasing returns to shareholders via higher targets for return on equity, more share buy-backs and increased cash dividends.”