LONDON (Alliance News) - Baillie Gifford Japan Trust PLC Thursday said its net asset value per share rose by just shy of 50%, beating its benchmark over the year, thanks to its holdings in the manufacturing, communication and utilities sectors.
Baillie Gifford Japan Trust said its NAV per share after deducting borrowings at fair value was 323 pence on August 31, compared with 216.9p at the same point last year.
The 49% increase beat the performance of the company's benchmark index, TOPIX, by 22.3 percentage points over the year.
The trust said that gearing had contributed to its strong performance and said that borrowing to invest in Japanese equities is a "sensible strategy", as it expects very strong earnings growth in Japanese companies in the next couple of years. Net gearing stood at 16% of shareholders funds, down three percentage points on last year.
But the trust said it was wary of the EU's new rules on shadow banking, as it will require the trust to appoint a depositary, which will cost money "with no obvious benefit in return". The new rules require it to appoint an Alternative Investment Fund Manager, which will be responsible for portfolio and risk management and will be regulated under the EU's new regulations.
The trust announced the resignation of Chairman Richard Barfield on Wednesday. He will be succeeded by current Chairman of the Audit Committee Nick Bannerman in November 2014.
Baillie Gifford Japan Trust shares were quoted at 356.98 pence early Thursday, up 0.98p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Baillie Gifford Japan Trust PLC (BGFD)