'How to buy local knowledge in Warren Buffett’s favourite foreign market'
With managers based in Tokyo, this Japanese trust continues to outperform |
Summary of recent financial results
‘Even though the Japanese market has had a very strong run over the past 18 months, this combination of corporate governance reforms, structural transformation and appealing valuations should help sustain and encourage investors’ appetite for Japan stocks,’ Weindling and Urabe said. |
JFJ 5 Dec NAV 664.33p
At 580p discount 12.7%
Wonder why dividend policy consultation is dragging on so long. An email and telephone follow up call with the top 10 to 15 shareholders shouldn't take long. |
Thanks Neilyb645. |
Dividend policy
The Company is managed to produce capital growth and not to produce any particular level of dividend and therefore the level of dividend will vary. The Company currently has a policy of paying out the majority of revenue available each year. The dividend reflects the available revenue for distribution each year and accordingly there are likely to be fluctuations year on year.
The Board notes that JSGI has paid an enhanced dividend since 2018. Following completion of the Transaction, the enlarged Board intends to undertake a review of JFJ's dividend policy, including consulting with JFJ's major shareholders. |
Has anybody seen anything about dividend policy for the enlarged trust? |
Looks like the company is buying back its own shares to stabilise the discount to NAV prior to merger day. Gearing looks to be going down so they must be selling off stock to fund it. The portfolio reorganisation is therefore already underway! Has anybody seen comment on what the dividend yield of the merged entity is likely to be? |
 Short term prospects for the local market look likely to be a bit chaotic but I can't see the Americans being too unsupportive of Japan as they will be an increasingly important cog in the western alliance. Rate cuts in the US look increasingly likely and this should stop the steady rot in the yen that has been going on for years and provide the foundations for a broader recovery in the Japanese economy. The Japs have some world class technology companies where product price is perhaps secondary to both availability and reliability. They can live with (but may not like) a firmer exchange rate! I'm quite encouraged by what has been going on over the past few days. In my view, what we are witnessing is the effects of an unwind of an unhealthy pattern of cheap borrowing in yen to finance non-yen spending and the covering of short yen positions. My anticipation is for a recovery from yesterday's upheavals and an opportunity to make some decent medium term investment. The reorganisation of this trust is timely as the merger and partial liquidation of the small companies trust that it is merging with will force management to update its investment strategy. |
this wont be pretty |
Citywire summary of merger proposal |
Proposed merger with JSGI
From first read the benefits to all shareholders are highlighted (reduced fee percentage, increased scale) but it appears to be much more directly beneficial to JSGI holders than JFJ, since they get a chance to redeem part of their holding and also close their larger discount |
More Kepler research
Dividend: "4% of NAV on the share price at the time of writing would equate to 4.6% thanks to the significant Discount, which underlines the value in the shares"
Also today, the half-year report
They see positives in both the japanese economy and companies, so who knows, maybe on this cycle, the 500p barrier might crack. |
Updated Kepler research - they think Japan could be a good country to be in during 2023, and that although volatile risky, "for investors with a long-term time horizon, we think JFJ is an attractive way to benefit from the exciting growth potential in Japanese companies." |
Not a pretty graph
Latest Kepler study says it's all related to US interest rate rises rather than intrinsic fortunes of the holdings. |
Down 30pc from ATH. Still hanging in here as surely Japan will start to rise as lots of so called experts predict. |
...and in a reversal of fortunes, JFJ is recently performing somewhat worse than my Japan tracker (SJPA). Some of its holdings must have turned toxic. |
Looking much better of late. Related to change of Japan's leadership it seems. |
Perhaps down to the increase of Covid cases in Japan and the fear of economic impact. Several Asian countries that were doing so well have been hit by recent outbreaks. Japan, Taiwan, Thailand, ..The WHO warning about 2021 has cast a cloud over exporting countries. |
Now down over 20 pc from ath. Still a hold for me but disappointed with recent performance. |
Down from a high of 744 this has taken quite a hit. But still a long term hold for me. |
JPMorgan Japanese:
For the neutral observer, it’s good to see Baillie Gifford is not getting its way everywhere and in Japan we have a bit of an upset for the company. A ‘blockbuster’ 12 months to the end of August saw last year’s third-placed JPMorgan Japanese (JFJ) overtake former sector leader Baillie Gifford Japan (BGFD) to win our award this year.
Stifel analyst Anthony Stern was impressed with JFJ’s 20% growth in net asset value for the financial year, not just because it trounced the 1% dip in Japan’s Topix index (in sterling terms), but because Nicholas Weindling and Miyako Urabe’s portfolio of growth stocks proved comparatively defensive in the coronavirus crash, declining 15% in the February-March sell-off, which was about half the descent of rivals BGFD and Fidelity Japan Values (FJV).
Although the other two trusts have rebounded faster since then, JFJ’s 42% rally from the March lows is still impressive and, combined with its earlier resilience, leaves it with the best three-year NAV return and information ratio, with BGFD not making it into the short list although the smaller companies focused Baillie Gifford Shin Nippon does. |
indeed.
I'm shocked by the very strong performance on this in the last 6 months. More than double. Stunned. |
Ekuuleus, yes I did thanks. It's frustrating that client records are not passed over when funds change hands. It's time consuming to get ID signed for just about everything we do these days. Meanwhile, the real money launderers in financial centres carry on. |
Shin Nippon hasn't been too shabby either - wasn't it the biggest IT riser in September.
Nonetheless, Japan has definitely been the place to be over the last 2 months or so. I hold both these two ITs.
There is some overlap - 3 of the top 10 holdings for the two trusts are the same companies. |
Not sure anyone is on this post but bought into JFJ early this year. Very impressed with manager who was on a video chat. I like the fact that he and the team are in Tokyo and track record is impressive. Still on a discount unlike BG shin nippon. |
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
Hot Features
Premium
