Building relationships with companies, actively working together to improve shareholder value.
Our portfolio of 20-30 stocks means we devote ample resources to research and engagement for every investment.
A five year horizon aligns our interests with those of management.
Discovering overlooked and under researched investment opportunities to unlock long term value.
Investing in the Japanese market for over two decades, with a dedicated team in London and Tokyo
Materials | 28% |
---|---|
Capital Goods | 18% |
Software and Services | 17% |
Healthcare Equipment and Services | 8% |
Consumer durables and Apparel | 8% |
Technology Hardware and Equipment | 7% |
Retailing | 4% |
Commercial and Professional Services | 3% |
Banks | 3% |
Transportation | 2% |
Automobiles and Components | 2% |
AVI Japan Opportunity Trust p.l.c is referred to as ‘AJOT’ throughout the website. AJOT’s investment managers, Asset Value Investors are referred to as ‘AVI’
IMPORTANT INFORMATION
USE OF THIS WEBSITE:
THIS WEBSITE IS NOT INTENDED TO OFFER OR TO PROMOTE THE OFFER OR SALE OF THE SHARES (THE “SHARES”) OF AVI JAPAN OPPORTUNITY TRUST PLC (THE “COMPANY”) IN THE UNITED STATES OR TO ANY “U.S. PERSONS” AS DEFINED IN REGULATION S (“US PERSONS”) UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).
THE MATERIALS CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, AND MUST NOT BE MADE AVAILABLE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO US PERSONS OR INTO OR WITHIN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR IN ANY OTHER JURISDICTION WHERE, OR TO ANY OTHER PERSON TO WHOM, TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAW OR REGULATION.
The contents of this website are communicated by Asset Value Investors Limited (“AVI”), which is authorised and regulated by the UK Financial Conduct Authority, with registered number 01881101 and which has its registered office at 2 Cavendish Square, London W1G 0PU, United Kingdom.
The information contained in this website does not constitute or form a part of any offer to sell or issue, or the solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States or in any jurisdiction in which, or to any person to whom, such an offer or solicitation would be unlawful.
Nothing in this website is to be taken as investment or tax advice. If you are unclear about any of the information on this website or its suitability for you, you must contact your financial or tax adviser, or an independent financial or tax adviser before making any investment or financial decisions.
The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the “Investment Company Act“), and as such holders of the Shares are not and will not be entitled to the benefits of the Investment Company Act. The Shares have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, assigned or otherwise transferred, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US Persons. There has been and will be no public offer of the Shares in the United States. The offer and sale of the Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or South Africa. Potential users of the information contained in this website are requested to inform themselves about and to observe all applicable restrictions.
General risk warning: All investment is subject to risk. The value of the Shares may go down as well as go up. Past performance is no guarantee of future returns and there is no guarantee that the market price of the Shares will fully reflect their underlying net asset value. There is also no guarantee that the Company’s investment objective will be achieved.
The information contained in this website may contain forward-looking statements. Any statement other than a statement of historical fact is a forward-looking statement. Actual results may differ materially from those expressed or implied by any forward-looking statement. You should not place undue reliance on any forward-looking statement.
Neither the Company nor AVI undertakes any obligation to update or revise any information in this website, including without limitation, any forward-looking statements, whether as a result of new information, future events or otherwise, and neither the Company nor AVI will confirm the accuracy or completeness of any information at any given time.
This website may contain links to third party websites. These links are provided for your information and convenience only, and do not amount to a recommendation or endorsement by the Company or AVI of that third party or its website. Neither the Company nor AVI has any control over the content of any third party website and neither the Company nor AVI has verified the accuracy of any content on any third party website. Accordingly, neither the Company nor AVI is liable for the content or availability (or lack of availability) of such third party websites.
This website is provided for your use “as is” without any warranties (whether express or implied) of any kind including, but not limited to, the warranty of non-infringement of third party rights or freedom from computer virus. As a result, neither the Company nor AVI accepts any ongoing obligation or responsibility in respect of any errors, omissions, interruptions or delays in service which may occur. Internet is not a secure medium of communication unless the data being sent is encrypted. Neither the Company nor AVI accepts any responsibility for unauthorised access by a third party or the corruption of data sent to it.
By continuing to use this website, you agree to the exclusion by the Company and AVI, to the extent permitted by applicable law and regulation, of any and all liability for any direct, indirect, punitive, consequential, incidental, special or other damages, or any loss of profits, revenue or data arising out of or relating to your use of and our provision of this website and its content. The Company may change these terms and conditions from time to time and any such changes will be posted on this website. Your access to this website is governed by the version of these terms and conditions then in force.
By clicking “Agree” below, you represent, warrant, undertake and agree that (1) you have read, understood and agree to be bound by the terms and conditions and other information set out herein, (2) you are permitted under applicable laws and regulations to receive the information contained in this website, (3) you are located outside the United States and are not a US Person, and (4) you will not transmit or otherwise send any information contained in this website to any persons in the United States or who are US Persons or to any publications with a general circulation in the United States. If you cannot so represent, warrant, undertake and agree, you must click the button labelled “Decline” or otherwise exit this website.
Manager's Comment - February
AJOT’s NAV fell -1.6% over the month. Share price performance of the underlying companies in Yen was healthy, with TSI Holdings the standout contributor, whose share price gained +20% adding 110bps to performance. T Hasegawa and NC Holdings detracted, with a more difficult cost environment weighing on profits.
It was Yen weakness which weighed on the NAV, as Kazuo Ueda, the newly appointed Bank of Japan (BoJ) governor, disappointed those anticipating a more aggressive path towards rate rises, with a cautious tone on the ending of the BoJ’s Yield Curve Control (YCC). With January CPI coming in at 4.3%, the highest since 1981, we think it isn’t a matter of if YCC will end but when, which would be a boon for the Yen.
Manager's Comment - January
AJOT had a strong month, with NAV growth of +5.4%. This came despite Japanese small companies lagging buoyant markets, with the MSCI Japan Small Cap returning +1.6% compared to the MSCI Japan’s +3.8% and the MSCI World +4.6% (all in GBP).
It was an encouraging month, with two large holdings, TSI Holdings and Shin-Etsu Polymer, seeing their shares price rise by +18% and +14%, respectively, together contributing 184bps to performance. There were few detractors, with LOCONDO being the largest with a -6% share price decline reducing performance by 28bps.
Manager's Comment - December
AJOT’s NAV increased +4.5% over the quarter, aided partially by a weakening of the Pound against the Yen which added +2.4% to returns. During the quarter, for the first time in almost three years, the British members of the investment team visited Japan. The trip focused on existing holdings where we met the presidents/chairmen of six of our top ten positions and three companies granted us access to their factory, logistics warehouse and R&D centre respectively. Meetings were cordial and constructive in what was for many companies their first time meeting us face-to-face.
Manager's Comment - November
AJOT’s NAV increased by +3.5% over the month. DTS was the largest detractor giving up part of its gains from earlier in the year, while the share prices of Digital Garage, Teikoku Electric and Tokyo Radiator increased by double digits.
Following hot on the heels of AJOT’s AJBell Japan Equity Active win in September, this month we were delighted to collect the Citywire award for the Best Japanese Equities trust. AJOT’s performance since launch has been a testament to the success of finding undervalued, high-quality companies and engaging with management to unlock value. It hasn’t been the easiest period for small-cap Japanese companies, but the performance highlights the Trust’s ability to generate attractive returns regardless of market conditions.
Manager's Comment - October
A rather glum NAV return of -2.5% for the month masked what was a respectable return in Japanese Yen of +3.2%. Japan’s core CPI reached 3.0% in September, the highest since 1991 after adjusting for consumption tax rises. The Bank of Japan’s unwillingness to adapt its yield control policy in the face of inflation and rising global rates continues to weigh on the Yen. While our investment decisions are not predicated on the direction or timing of a Yen recovery, we don’t believe the status quo is sustainable and should the BoJ change its policy, a strengthening Yen would be a huge boon to returns.
Manager's Comment - September
AJOT’s NAV increased +4.5% over the quarter, aided partially by a weakening of the Pound against the Yen which added +2.4% to returns. During the quarter, for the first time in almost three years, the British members of the investment team visited Japan. The trip focused on existing holdings where we met the presidents/chairmen of six of our top ten positions and three companies granted us access to their factory, logistics warehouse and R&D centre respectively. Meetings were cordial and constructive in what was for many companies their first time meeting us face-to-face.
Manager's Comment - August
Over the month, our companies finished reporting earnings. Weighted operating profits grew in aggregate by +2% year-on-year, lagging sales growth of +11%. Over two-thirds of the companies in the portfolio saw margins decline year-on-year which was expected given price increases lag cost pressures. However, we are seeing promising signs that our companies have been better able to pass on cost increases than in the past, as Japanese customers and consumers are accepting the inevitability of the first real inflation since the early 1990s. In fact, we’ve found that some companies have been surprised by their ability to increase prices. Shin-Etsu Polymer is a case in point, seeing sales and profits rise +20% and +55% respectively last quarter.
Manager's Comment - July
AJOT’s NAV increased by +8.3% over the month, aided slightly by a +1.7% strengthening in the Japanese Yen. The strong performance was broad-based across the portfolio, with only one company, Fujitec, detracting from returns.
The ruling LDP coalition solidified its position by comfortably winning a majority in the upper house elections, a vote that was overshadowed by the shocking and tragic assassination of former Prime Minister Shinzo Abe at the start of the month. Inflation in June ticked slightly higher to a still manageable 2.4% (headline CPI) with no change to the BoJ’s expansionary monetary policy.
Manager's Comment - June
After the end of the quarter, it was with great sadness that former Prime minister Shinzo Abe passed away. His death was a shocking tragedy. It has taken a number of years for companies/management to buy into corporate governance reforms, but there is now clear evidence of a shift in attitudes amongst corporate Japan, and that is one of the many important legacies of Shinzo Abe.
AJOT’s NAV fell -3.8% over the month, due almost entirely to a -3.4% weakening in the Japanese Yen. In local currency terms it was a relatively good period for the Japanese stock market with the MSCI Japan holding up well, returning -4.4% vs the MSCI Europe -9.0% and the S&P 500 -16.2%.
Manager's Comment - May
AJOT’s NAV increased by +3.0% over the month, as the portfolio’s companies finished reporting earnings. Our companies are not immune to rising raw material costs, and more of them than not saw margin pressure in the last quarter. However, our companies, which generally have good levels of pricing power, have expressed that they expect to pass on most of the cost increases next year and the impact on margins should subside. For those holdings with a March year-end, dividends increased by an average of 16% with five companies announcing new share buybacks, joining three companies who have ongoing programs.