Writing in its results for the six months to end February, the trust said, the metric, currently 87%, would be displayed in future reports following: “a significant amount of discussion recently in the financial press about the need for true active management of portfolios rather than any mimicking of indices.
The metric has made news recently following a number of high profile fund managers have weighed in on the subject, most notably Neptune’s Robin Geffen who called on the Financial Conduct Authority to make the display of active share mandatory.
According to Baillie Gifford, the trust’s active share reflects an investment approach that “emphasises the individual merits of companies” is being taken. It added, the trust’s active share remained flat remained unchanged from the previous year end.
For the six months, the trust’s NAV once borrowings had been deducted at fair value, rose 20.5% to 425.9p, it said, helped along by good stock selection in a buoyant market and “the positive impact of gearing”.
Looking forward, while Japanese GDP only rose 0.4% during the quarter, Baillie Gifford said the rise masked encouraging trends.
Not only did the labour market continue to tighten, female participation rose and, importantly, wage growth looks like it is beginning to accelerate.
“We have commented in previous reports on the encouraging improvements in corporate governance in Japan and there have been further positive developments since then,” the firm said.
These include the announcement of a corporate governance code and a growing emphasis on increasing shareholder returns.
“Recent shifts in domestic asset allocation and the need for Japan to increase returns to support an ageing population means that pressure for action is increasing and the scope for improvement in balance sheet management is very large as cash balances have built up through the years of deflation.”
Economic policy too remains supportive, it said, adding: “While hopes for Mr Abe’s Third Arrow have perhaps faded the positive impacts of various policies are beginning to be felt.”
