ABRDN JAPAN INVESTMENT TRUST abrdn Japan Investment Trust plc
Japan specialists identifying exceptional companies
Performance Data and Analytics to 31 January 2023
Investment objective | Morningstar Analyst RatingTM |
To achieve long-term capital growth principally through investment in listed Japanese companies which are believed by the Investment Manager to have above average prospects for growth.
Benchmark
Topix Index (in sterling terms).
Cumulative performance (%)
as at | 1 | 3 | 6 | 1 | 3 | 5 | |
31/01/23 | month | months | months | year | years | years | |
Share Price | 580.0p | 3.1 | 9.8 | 2.6 | (9.9) | 1.0 | (1.8) |
NAVA | 670.3p | 3.8 | 5.0 | (0.5) | (6.5) | 4.3 | 2.5 |
Benchmark | 3.5 | 9.7 | 4.8 | 3.4 | 12.5 | 17.4 | |
Discrete performance (%)
31/01/23 | 31/01/22 | 31/01/21 | 31/01/20 | 31/01/19 | |
Share Price | (9.9) | (13.6) | 29.7 | 18.8 | (18.2) |
NAVA | (6.5) | (8.6) | 22.0 | 19.3 | (17.6) |
Benchmark | 3.4 | (0.4) | 9.3 | 10.4 | (5.4) |
Total return; NAV to NAV, net income reinvested, GBP. Share price total return is on a mid-to-mid basis.
Dividend calculations are to reinvest as at the ex-dividend date. NAV returns based on NAVs with debt valued at fair value. Source: abrdn Investments Limited, Lipper and Morningstar.
Past performance is not a guide to future results.
- Including current year revenue.
- © 2023 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For more detailed information about Morningstar's Analyst Rating, including its methodology, please go to: http://corporate.morningstar.com/us/documents/ MethodologyDocuments/AnalystRatingforFundsMethodology.pdf The Morningstar Analyst Rating for Funds is a forward-looking analysis of a fund. Morningstar has identified five key areas crucial to predicting the future success of a fund: People, Parent, Process, Performance, and Price. The pillars are used in determining the Morningstar Analyst Rating for a fund. Morningstar Analyst Ratings are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund's ability to outperform its benchmark and peers through time, within the context of the level of risk taken over the long term. Neutral represents funds in which our analysts don't have a strong positive or negative conviction over the long term and Negative represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance over the long term. Long term is defined as a full market cycle or at least five years. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detailed information about the Morningstar Analyst Rating for Funds, please visit http://global.morningstar.com/managerdisclosures.
- Morningstar Analyst Rating™
Morningstar analysts assign the ratings globally on a five-tier scale with three positive ratings of Gold, Silver and Bronze.
Morningstar RatingTM
- Morningstar RatingTM for Funds
Morningstar rates funds from one to five stars based on how well they've performed (after adjusting for risk and accounting for all sales charges) in comparison to similar funds.
Ten largest equity holdings (%)
Tokio Marine | 5.4 |
Sony | 4.4 |
Keyence | 3.3 |
Shin-Etsu Chemical | 2.9 |
Ajinomoto | 2.7 |
Asahi | 2.7 |
Toyota Motor | 2.6 |
Tokyu Fudosan | 2.6 |
Nippon Paint Holdings | 2.6 |
Welcia | 2.5 |
Total | 31.7 |
Total number of investments | 69 |
All sources (unless indicated): abrdn: 31 January 2023.
invtrusts.co.uk
abrdn Japan Investment Trust plc
1 Year Premium/Discount Chart (%)
-5
-10
-15
-20
-25 | ||||||
Jan-22 | Mar-22 | May-22 | Jul-22 | Sep-22 | Nov-22 | Jan-23 |
Fund managers' report
Equity markets started the year with a note of positivity. There were widespread rises, as robust data and upbeat economic forecasts gave investors confidence to buy stocks. Inflation data showed a deceleration in rising prices, indicating that global central banks could be less hawkish in 2023, including statements from the Bank of Canada that it would pause rate hikes. The MSCI Japan Index rose by 4.69%, while the MSCI Japan Small Cap Index rose by 2.47% (total returns in yen terms).
The Bank Of Japan (BoJ) held interest rates in January but introduced a new tool to keep yields within target bands. The BoJ will offer financial institutions funding for terms up to 10 years at variable rates. Consumer inflation rose to 4.0% year on year, its highest level since the early 1980s, mainly driven by energy prices. BoJ officials emphasised again the need to keep rates low, with any change unlikely before Governor Kuroda leaves office in April. Prime minister Kishida is likely to nominate Kuroda's replacement in early February.
The Reuters Tankan survey showed manufacturing confidence falling negative, to the lowest level since December 2020. Car makers were particularly downbeat, noting persistent problems in materials and supply chains. Flash composite purchasing manager index data showed some improvement in January, although manufacturing still remains in contractionary territory.
Following a shift in China's Covid-19 policy, December was a difficult month for many of our holdings with operations in China. Precision component maker Misumi's monthly sales suggested that the operating environment in China expectedly deteriorated in the month of December, which also led to weaker- than-expected results and a downward revision of its full-year guidance. However, there are already signs of recovery in January, as evident from power tool maker Makita's commentary that their plants in China have returned to normal operations after the swift spread of Covid towards the end of last year.
End-December results suggested continued signs of easing supply chains.
Fund managers' report continues overleaf
- Expressed as a percentage of average daily net assets for the year ended 31 March 2022. The Ongoing Charges Figure (OCF) is the overall cost shown as a percentage of the value of the assets of the Company. It is made up of the Annual Management Fee and other charges. It does not include any costs associated with buying shares in the Company or the cost of buying and selling stocks within the Company. The OCF can help you compare the annual operating expenses of different Companies.
- Net gearing is defined as a percentage, with net debt (total debt less cash/cash equivalents) divided by shareholders' funds.
- The 'Active Share' percentage is a measure used to describe what proportion of the Company's holdings differ from the benchmark index holdings.
Sector allocation (%)
Trust | Benchmark | |
Consumer | 21.1 | 17.8 |
Discretionary | ||
Industrials | 20.6 | 23.5 |
Information | 14.0 | 13.1 |
Technology | ||
Consumer Staples | 11.6 | 7.5 |
Health Care | 10.1 | 8.6 |
Financials | 9.4 | 11.5 |
Communication | 5.1 | 8.2 |
Services | ||
Real Estate | 4.2 | 1.9 |
Materials | 2.9 | 5.7 |
Energy | 0.8 | 0.9 |
Utilities | - | 1.3 |
Cash | 0.2 | - |
Total | 100.0 | 100.0 |
Fund risk statistics
3 Years | 5 Years | |
Annualised Standard | 15.57 | 13.84 |
Deviation of Fund | ||
Beta | 1.05 | 1.04 |
Sharpe Ratio | 0.07 | 0.04 |
Annualised Tracking Error | 5.34 | 5.18 |
Annualised Information Ratio | (0.40) | (0.37) |
R-Squared | 0.88 | 0.86 |
Source: abrdn & Factset.
Basis: Total Return, Gross of Fees, GBP.
Please note that risk analytics figures are calculated on gross returns whereas the performance figures are based on net asset value(NAV) returns. In addition, the risk analytics figures lag the performance figures by a month.
Key information
Calendar
Year end | 31 March |
Accounts published | June |
Annual General | July |
Meeting | |
Dividend paid | December and July |
Launch date | October 1998 |
Fund manager | Japanese Equities Team |
Ongoing chargesC | 1.00% |
Annual | 0.75% of the lower of |
management fee | net assets and market |
capitalisation | |
Premium/(Discount) | (13.5)% |
Historic yield | 2.4% |
Net gearingD | 12.5% |
Active shareE | 72.8% |
abrdn Japan Investment Trust plc | 02 |
abrdn Japan Investment Trust plc
Fund managers' report - continued
These include component shortage and logistics difficulties that have hurt some of our holdings in the recent past. Robot maker Fanuc's results beat expectations as improving semiconductor supply and cost pass-throughs helped recover earnings. The company noted that robotics demand remains firm for a wide range of applications, including EVs, batteries and general industries. IT service group NEC commented on signs of easing component shortages that will help convert its growing backlog of orders into revenue. Meanwhile, semiconductor tester maker Advantest commented on the possibility of shortening production lead time.
With the easing of supply chains, higher inventory levels that have been built up as a buffer have been gradually unwound. This has affected some of our holdings' demand outlook. Healthcare and semiconductor materials maker Hoya commented on the potential inventory adjustment for mask blanks used in the leading-edge semiconductor production in the near-term. In spite of the difficult operating environment, Shin-Etsu Chemical reported better-than- expected results led by PVC materials used for housing and semiconductor wafers. The company commented on the potential recovery ahead for PVC prices in the US following a rebound in Asia as higher cost players reduce supply while demand recovers following the reopening of China's economy. Elsewhere, semiconductor tester maker Advantest's results showed that the structural tailwind for high-end tester for high performance computing and AI applications continue to offset headwinds for the wider semiconductor industry.
SME M&A advisory firm, Nihon M&A Center reported a weak set of results.
In contrast to management guidance and investor expectations, deal volumes were weaker than expected and, more importantly, the mix of completed deals were skewed toward smaller-sized acquisitions, which resulted in lower fees. However, we believe this is largely a timing issue as suggested by the growing pipeline of potential deals and resumption of deal sourcing activities.
Portfolio Moves
During the month, we exited industrial gas provider Nippon Sanso and material handling system supplier Daifuku in view of better opportunities elsewhere.
Outlook
Looking ahead, there is cause for optimism. The macroeconomic conditions that have hurt some of our holdings in the recent past appear to be reversing: the yen has strengthened, inflationary pressures are easing, and interest rate rises are moderating. While there are still concerns that the market may be underestimating the persistency of inflation, and that geopolitics could still lead to sudden changes in the economic outlook, we believe that the prospects
of better run businesses should, over time, outperform. And thus we have stayed true to our principles: we believe that investing in a group of well-run companies, alongside active engagement, will lead to better outcomes for our clients.
The risk outlined overleaf relating to gearing and exchange rate movements are particularly relevant to this trust but should be read in conjunction with all warnings and comments given.
Important information overleaf
AIFMD Leverage Limits
Gross Notional | 2.5x |
Commitment | 2x |
Assets/Debt (£m)
Gross assets | 94.0 |
Debt | 10.6 |
Cash & cash | 0.2 |
equivalents | |
Capital structure
Ordinary shares | 12,435,591 |
Treasury shares | 3,385,981 |
Allocation of management fees and finance costs
Capital | 60% |
Revenue | 40% |
Trading details
Reuters/Epic/ | AJIT |
Bloomberg code | |
ISIN code | GB0003920757 |
Sedol code | 0392075 |
Stockbrokers | Shore Capital |
Market makers | CFEP, INV, JPMS, |
STFL, SCAP, WINS | |
i
Factsheet
Receive the factsheet by email as soon as it is available by registering at www.invtrusts.co.uk/#signup www.aberdeenjapan.co.uk
Contact
Private investors 0808 500 4000
Institutional investors InvestmentTrustInvestorRelations-UK@abrdn.com
+44 (0)20 7463 5971
+44 (0)131 222 1863
abrdn Japan Investment Trust plc | 03 |
Important information
Risk factors you should consider prior to investing:
- The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
- Past performance is not a guide to future results.
- Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
- The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company's assets will result in a magnified movement in the NAV.
- The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company's shares.
- The Company may charge expenses to capital which may erode the capital value of the investment.
- Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss.
- Movements in exchange rates will impact on both the level of income received and the capital value of your investment.
- There is no guarantee that the market price of the Company's shares will fully reflect their underlying Net Asset Value.
- As with all stock exchange investments the value of the Company's shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
- Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.
Other important information:
An investment trust should be considered only as part of a balanced portfolio. The information contained in this document should not be considered as an offer, solicitation or investment recommendation to deal in the shares of any securities or financial instruments. It is not intended for distribution or use by any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication or use would be prohibited. Nothing herein constitutes investment, legal, tax or other advice and is not to be relied upon in making an investment or other decision. No recommendation is made, positive or otherwise, regarding individual securities mentioned. This is not an invitation to subscribe for shares and is by way of information only. Subscriptions will only be received and shares issued on the basis of the current Key Information Document (KID). These can be obtained free of charge from abrdn Investments Limited, PO Box 11020, Chelmsford, Essex, CM99 2DB or available on www.invtrusts.co.uk. Any data contained herein which is attributed to a third party ("Third Party Data") is the property of (a) third party supplier(s) (the "Owner") and is licensed for use by abrdn*. Third Party Data may not be copied or distributed. Third Party Data is provided "as is" and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none of the Owner, abrdn* or any other third party (including any third party involved in providing and/or compiling Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Neither the Owner nor any other third party sponsors, endorses or promotes the fund or product to which Third Party Data relates. * abrdn means the relevant member of abrdn group, being abrdn plc together with its subsidiaries, subsidiary undertakings and associated companies (whether direct or indirect) from time to time.
Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London, EC2M 4AG.
abrdn Investments Limited, registered in Scotland (No. 108419), 10 Queen's Terrace, Aberdeen AB10 1XL. Both companies are authorised and regulated by the Financial Conduct Authority in the UK.
For more information visit invtrusts.co.uk
invtrusts.co.uk | 0001733325 |
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Disclaimer
Aberdeen Japan Investment Trust plc published this content on 22 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 March 2023 08:56:05 UTC.
