Aberdeen Japan aims to generate long-term capital growth from a concentrated portfolio of Japanese stocks.
The trust is managed by the Aberdeen Asian Equities Team, who look for stocks with high quality management and good or improving corporate governance as well as strong financial characteristics which believe means they will be able to generate above-market growth over the long run.
The trust’s style has been out of favour in recent years, and this has resulted in it sinking to a discount of 12.5%, significantly wider than the peer group average and at a level the board have been active with buybacks.
Key themes in the portfolio are automation and robotics as well as pharmaceutical innovation, areas in which Japanese companies are among the world’s leaders.
The trust is also benefitting from increasing corporate governance reform in Japan supported by a drive by the government, which is hoping to thereby boost economic productivity and growth.
The trust only pays out the minimum dividends necessary to retain investment trust status which means payouts are low and volatile; the yield is currently 1%.
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