Baillie Gifford Japan goes small for growth

The trust aims for long-term capital growth by investing in 40 to 70 mainly medium and smaller listed companies that its managers believe have above-average growth prospects. It can also invest in larger companies when its managers think that is appropriate.

The trust has a very experienced manager in Sarah Whitely, who has worked in Baillie Gifford's Japanese equity team since 1982 and headed it since 2001.

She looks for innovative business models which disrupt traditional Japanese practices or benefit from opportunities such as overseas growth. An example is large-cap Japan Tobacco, whose overseas business is growing strongly.

She take a three to five-year view when selecting investments.

As the trust does not seek to track its benchmark, the Topix total return, it can be volatile against the index and underperform it, such as over the six months to the end of February when larger companies did better.

Holdings cannot exceed 5 per cent of the portfolio at the time of purchase, though may be allowed to become more than this if the trust's investment team continues to be convinced of their investment attractions.

The trust has a reasonable total expense ratio of 1.4 per cent.

Source: Morningstar.

Performance data as at 29 March 2012.

Top 10 holdings as at 29 February 2012

Sector breakdown