Manager's Report
John MacDougall - Trust Manager
John graduated BA in Ancient & Modern History from Oxford University in 2000. He joined Baillie Gifford in 2000 and is now Investment Manager in the Japanese Investment Team. John is a CFA charterholder.
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The net asset value per share fell by 6.7%* compared with a 0.3%** decrease in the weighted composite of Topix Small, Jasdaq and Tokyo Stock Exchange Second Section Indices, in sterling terms. After the recent period of strength the yen weakened a little from the middle of the month.
Economic data for Japan remained mixed with encouraging export and land price figures released during the month. Small business confidence also rebounded a little. However, unemployment ticked up and core inflation rose at the fastest rate in a decade. Political wrangling over the appointment of the next governor of the Bank of Japan continued.
We continue to expect cautious earnings forecasts for the year to March 2009, given global uncertainty and rising input costs. However, corporate balance sheets are strong in Japan and valuations are at low levels given the increased focus on shareholder returns.
A new holding was purchased in Ahresty, a global leader in the aluminium die-cast industry.
* Source - Fundamental Data Ltd, no income
** Source - Fundamental Data Ltd and Baillie Gifford & Co, no income
Investment markets and conditions can change rapidly and the views expressed by our Managers should not be relied upon when making investment decisions. Remember, past performance is not a guide to future performance. The value of your investment may go down as well as up and you may not get back the amount you invested. Also, as the Trust invests in overseas securities changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up.
