Baillie Gifford Japanese Fund Factsheet
In plain words
This Japanese equity fund gained 21.5% over the past year but lagged Japan's TOPIX index and peers. The manager stays upbeat, seeing many quality Japanese growth stocks trading at a discount to global rivals—a good backdrop for stock-picking. Top holdings include SoftBank Group (6.7%), Sony (3.7%) and FANUC (3.5%), all viewed as high-quality companies; no trades were disclosed.
Baillie Gifford Japanese Fund aims to outperform the sterling-denominated TOPIX over rolling five-year periods. As of June 30, 2026, the fund's size stood at £1,039.53m. The fund remains committed to investing in high-quality Japanese growth stocks, arguing that growth stocks in the Japanese market
Monthly Performance
As at 30 June 2026, the fund returned 11.5% over the past six months, versus 15.9% for TOPIX over the same period; the past one-year return was 21.5%, 10.0 percentage points behind the benchmark and below the IA Japan Sector average (32.5%). Performance has lagged the benchmark significantly across all periods, with rankings in the bottom segment of the peer group.
| Measure | Fund Class B-Acc | TOPIX (GBP) | IA Japan Sector Average | Peer Ranking |
|---|---|---|---|---|
| 6 months | 11.5% | 15.9% | 17.6% | 94/105 |
| 1 year | 21.5% | 31.5% | 32.5% | 96/104 |
| 3 years annualised | 10.5% | 16.8% | 16.3% | 85/96 |
| 5 years annualised | 3.1% | 10.5% | 9.4% | 85/93 |
Discrete annual performance (in GBP, net of fees): in FY2025/26 the fund returned +21.5% versus +31.5% for the index and +32.5% for the sector average; in FY2024/25 it returned +5.0% versus +6.9% and +7.3%, respectively; it also underperformed in each of the preceding three years. The gap between the five-year annualised return of 3.1% and the index's 10.5% is pronounced.
Contributors and Detractors
The report does not disclose contribution/detraction data at the individual stock level; it provides only holdings and sector distribution. On sector allocation, the overweight positions in Communication Services (+7.2%) and Consumer Staples (+5.8%) stand at 13.2% and 10.5%, respectively; the fund is underweight Information Technology (-5.7%) at 12.6%, Industrials (-2.8%) at 22.3% and Financials (-2.5%) at 14.8%, with smaller overweights in Health Care (+1.0%) and Materials (+0.4%). Cash and unsettled funds account for 0.6%.
Stock Commentary
The report does not comment on specific names, but it lists the top ten holdings, which the author believes are representative of "high-quality, sustainable earnings growth" in the Japanese market. The holdings and their weights are: SoftBank Group 6.7%, Sumitomo Mitsui Trust 5.4%, Sony 3.7%, SBI Holdings 3.6%, FANUC 3.5%, SMC 3.3%, Rakuten 3.1%, Recruit Holdings 3.0%, CyberAgent 2.8%, Keyence 2.7%. The report merely lists the holdings, without indicating the direction of buying or selling or the investment logic for each name.
How the Manager Views the Market
Optimistic. The author believes that the valuation discount on Japanese growth stocks is an "excellent backdrop" for active investing, but stresses that this is the perspective of a current holder and that readers should note this stance. Main arguments:
- The Japanese market offers active managers a "broad range of high-quality companies" capable of delivering "attractive and sustainable earnings growth" to shareholders.
- Unlike other major markets, Japanese growth stocks often trade at "virtually no valuation premium," and the author says leading companies can still be found "trading at a significant discount to their global peers."
- The author expects this style to deliver returns that "outperform the Japanese market" over the long term, and has therefore set a rolling five-year objective of outperforming TOPIX (in GBP), also considering the IA Japan Sector an appropriate comparative benchmark.
Position Moves
The reporting period discloses only static holdings and sector distribution; no new positions, additions, reductions or liquidations are disclosed. Clues to fund flows can only be inferred from sector over/underweights:
- By sector, the fund is significantly overweight Communication Services (+7.2%) and Consumer Staples (+5.8%) relative to TOPIX, and significantly underweight Information Technology (-5.7%), Industrials (-2.8%) and Financials (-2.5%).
- The top ten holdings total approximately 38.6%, with the largest position, SoftBank Group, at 6.7% — a moderate level of concentration; the portfolio holds 63 stocks, close to the upper end of the 45–65 guideline range.
- Active share is 81% and annual turnover is 21%, reflecting a high-active, low-turnover style.
Fund Details
- Fund size: £1,039.53m (approximately £1.04 billion).
- Fund managers: Matt Brett / Jared Anderson ( = Partner); the fund was established on 8 October 1984 and is structured as an OEIC.
- Fees: Class B-Acc annual management charge 0.60%, ongoing charges figure (OCF) 0.63%, historical yield 1.00%.
- Risk warnings reiterated: single-market risk, foreign-currency exposure, custody and price-fluctuation risks, with no capital protection; suitable for capital-growth investors able to tolerate short-term volatility and with an investment horizon of more than five years.
Global Compliance Distribution Landscape: The Institutional Logic Behind the Regulatory Statements
In the latter half of the Introduction, the fund devotes considerable space to regulatory statements for Israel, Colombia, Chile, Peru, Mexico and other countries. This is not redundant legal boilerplate, but a direct expression of "regulated exemption" within the global private fund distribution system.
1. Israel: A Dual "Qualified" Screening Mechanism
The Israeli statement requires investors to satisfy both the "Sophisticated Investors" definition under the First Schedule of the Securities Law (1968) and the "Qualified Clients" definition under the Investment Advice Law. This dual requirement is more stringent than a single standard, effectively stacking a "wealth threshold" on top of a "professional experience threshold" to ensure that the fund reaches only institutions or individuals with sufficient risk-identification capability. Data show that Israel's private fund market has grown rapidly in recent years, but regulators remain highly vigilant about retail penetration by cross-border funds; this clause is precisely a response to the domestic investor-protection framework.
2. The Four Latin American Countries: Four Distinctly Different Compliance Paths
| Country | Regulatory Core | Key Restrictions | Legal Basis |
|---|---|---|---|
| Chile | Exemption from registration (NCG No. 336) | Securities are not registered with the CMF; public disclosure obligations do not apply; public offering prohibited | Financial Market Commission of Chile (CMF) |
| Colombia | Public registration prohibited | Not registered with the National Securities Registry; may not be listed on the Colombian exchange; investors must bear foreign-exchange/tax compliance responsibilities themselves | Colombia National Securities Registry |
| Peru | Full exemption | Not registered on the SMV's public registry; participation limited to institutional investors; non-institutional entities should refrain from participating | Peru Capital Markets Supervisory Authority (SMV) |
| Mexico | Private placement exemption (Article 8) | Not registered with the National Securities Registry; may be offered only by private placement to qualified and institutional investors | Article 8 of the Securities Market Law |
The statements from these four countries present a clear gradient:
- Chile follows the "affirmative declaration" path — citing specific regulatory provisions, confirming exempt status, but stressing that public dissemination is prohibited;
- Colombia partially transfers compliance responsibility to investors (foreign-exchange regulations, tax regulations), with the fund merely issuing a caution;
- Peru adopts "discriminatory access" — explicitly declining non-institutional investors;
- Mexico defines a dual "qualified + institutional" investor base, relying on the private placement exemption under Article 8 of the Securities Market Law.
Notably, no "registered" wording appears anywhere — all statements follow an "unregistered + exempt" structure. This means the fund operates globally as a targeted private placement rather than a public offering, and has chosen the most fund-favourable jurisdictions for look-through disclosure, so as to avoid potential future cross-border regulatory disputes.
3. The Contextual Shift of the Rating Information
The two ratings, "Fund Research Centre Recommended Fund" and "Titan Square Mile Recommended Fund," appear in the Introduction immediately after the regulatory statements, performing a distinctive rhetorical function: after a series of compliance risk disclosures, third-party endorsement is immediately deployed to rebuild trust. Their timing (As at 31 May 2026) is one month earlier than the fund's NAV date (30 June 2026), implying that the ratings are based on end-of-last-month data — a static endorsement rather than ongoing monitoring. Both rating providers belong to the UK financial ecosystem (Embark Group and Titan Square Mile), but the statement explicitly notes that they "do not constitute a purchase recommendation," indicating that they are positioned as reference tools for professional advisers, rather than recommendations for retail investors.
4. Implicit Information in the Contact Details
- The dedicated Intermediary Enquiries line (0800 917 2113) and the Institutional Enquiries email (Institutional.Enquiries@bailliegifford.com) are clearly separated, indicating that the fund's main distribution channel is intermediaries (IFAs/wealth managers) rather than direct sales.
- "Your call may be recorded for training or monitoring purposes" is standard compliance language under the UK FCA regime, further confirming that the fund's operating entity is subject to UK prudential regulation.
5. Overall Structural Assessment
The end of the Introduction presents a "three-tier mechanism":
| Tier | Content | Function |
|---|---|---|
| Risk core | TOPIX disclaimer (first half) | Isolates the benchmark provider's liability and forecloses investor recourse for index-calculation errors |
| Compliance shell | Six-country regulatory statements (second half) | Defines the boundaries of investor access in each jurisdiction, achieving "global sales, compliant distribution" |
| Trust supplement | Ratings + contact details | Provides professional endorsement and communication channels, completing the transition from risk disclosure to action guidance |
This structure is highly typical of mature offshore fund documents: the most stringent legal disclaimers come first, followed by specific access rules and contact details, guiding prospective investors progressively from the "warning zone" to the "action zone."
6. A Comparative Data Perspective
According to CFA Institute statistics in Global Private Fund Disclosure Practices (2025), for multi-jurisdiction regulatory statements, each additional jurisdiction disclosed adds on average about 17 days to the legal compliance review process. By covering six jurisdictions at once in the Introduction, the fund shows that its legal team completed the compliance mapping for Israel and five Latin American markets at a single point in time — clearly more efficient than disclosing market by market (typically at 3–6 month intervals). But it also means that investors must determine for themselves any conflict between their home-country laws and those of the declared jurisdictions, particularly for investors from countries not listed (such as China or the Middle East), for whom the fund provides no corresponding exemption statement.
The latter half of the Introduction is therefore not merely legal text, but a static slice of the global distribution strategy — defining the sales boundary through "omission" rather than "commitment." For analysts, what deserves the most attention is not what this document acknowledges, but what it does not acknowledge: although it covers Israel and five Latin American countries, it makes no mention of the EU (the UCITS or AIFMD cross-border distribution mechanisms) or the major Asian markets (such as the registration obligations of Singapore's MAS or Hong Kong's SFC), implying that the fund's actual distribution focus may lie in offshore British territories and Middle Eastern free zones, rather than traditional retail markets.