Baillie Gifford launches Japan income fund

Baillie Gifford has expanded its Japanese equities offering with the launch of the Baillie Gifford Japanese Income Growth Fund.

Baillie Gifford launches Japan income fund

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The fund will be managed by Matthew Brett, who also manages the Baillie Gifford Japanese Fund.

The Edinburgh-based firm’s Japanese equities team has invested in a range of businesses with prospects for earnings growth, with the expectation that their share price will reflect the positive fundamentals over time. The same process will be applied to the new fund, with a bias towards income. 

The fund’s portfolio currently has a yield of 2.5%, and provides investors with the opportunity to benefit from a “widespread secular change in corporate attitudes to shareholder returns in the Japanese market” Baillie Gifford said.

During the three months following the fund’s inception investors will have access to a Y share class with a management fee of 25 basis points for the first 12 months. After that, the management fee on the Y share class will rise to 65 basis points. The offer ends 30 September 2016.

“Our new fund aims to generate strong long-term total returns as well as provide investors with a higher yield than the Japanese market,” said Brett. “We believe that our focus on companies with good growth prospects and strong balance sheets gives the best opportunity for dividend growth over the medium term,” he added. “We are seeing improving attitudes to corporate governance in Japan. Shareholder pay outs are increasing and there is scope for this trend to continue for many years.”

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