Capital at risk
Japan Smaller Companies
Japan’s inefficiencies offer unbounded upside potential for its new breed of entrepreneurial companies. We aim to capture these opportunities. Each holding is selected for its long-term growth potential.
Backing businesses, not the economy
By focusing on the fundamentals, we aim to uncover Japan’s mispriced and often underappreciated opportunities. Our first-hand experience of Japan’s rich history offers us strong insight into the significant structural changes at play here.
Pursuing growth in all forms
Japan Smaller Companies is distinctly long-term. We aim to capture asymmetrical equity market returns by investing in Japan’s most promising small-cap stocks.
Our portfolio contains 40-80 holdings from range of sectors and industries, each held for its own long-term idiosyncratic growth prospects.
We find these companies through bottom-up research, holding on for the long term in a bid to capture the full benefits of compounded growth in all its forms – from secular opportunities in emerging digital disruptors to the enduring growth of stalwart franchises to special situations of corporate reform.
Embracing the entrepreneurial
We aim to capture Japan’s outlier growth opportunities: businesses that are breaking the mould, embracing an entrepreneurial and experimental mindset and attacking the profit pools of less efficient incumbents.
The patience with which we pursue these growth businesses is a product of our pedigree. Having launched specialist mandates in the 1980s, we’re one of the few who’ve been doing this for over 40 years.
Though the uncovered and undiscovered nature of Japanese small cap investing often comes with significant short-term volatility, it also presents the prospect of outsized long-term upside.
Meet the manager
Documents
Philosophy and process
Explore our investment philosophy and the processes around how the team constructs the portfolio.
Quarterly update
Get the latest investment commentary, portfolio overview, transactions and performance information alongside governance engagement and voting.
Stewardship report
Find out about our conversations with portfolio companies, shareholder vote activity and consideration of environmental, social and governance matters.
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Strategy portfolio holdings
A list of the top 10 holdings that the representative portfolio invests in.
All figures up to: 28 February 2025
| # | Holding | % of portfolio |
|---|---|---|
| 1 | Yonex | 3.5% |
| 2 | Nifco | 3.4% |
| 3 | Lifenet Insurance | 3.4% |
| 4 | KATITAS | 3.1% |
| 5 | Cosmos Pharmaceutical | 3.0% |
| 6 | Harmonic Drive Systems | 3.0% |
| 7 | Tsugami | 2.9% |
| 8 | JEOL | 2.7% |
| 9 | Infomart | 2.6% |
| 10 | Gift Holdings Inc | 2.5% |
Please note
The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.
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You can invest in this strategy through the following fund(s).
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Insights
Key articles, videos and podcasts relating to the strategy:
Filters
China through a Japanese lens
Healthy returns: Japan’s assault on old-age disease
Japanese medical firms are making advances that could help fight cancer and Alzheimer’s.
SWCC Showa: rewiring Japan
How an ultra-traditional Japanese engineering firm became key to Japan’s power overhaul.
China through a Japanese lens
Japanese tech dominance is under increasing pressure in China from domestic challengers.
Upfront: Japanese equities
Praveen Kumar shares the latest on growth equities in Japan and why now is the time for small cap investors to be bold.
The fresh face of Japanese finance
New online services are transforming Japanese financial habits.
Why growth, why now?
Tough times play to the partnership’s strengths: analysing what enables us to adapt and thrive amid rapid change.
Spotting the stars amid a surge
Rising Japanese markets are flattering old-style companies: better to look for long-term growth.
Japan’s new growth opportunities
Seeking the entrepreneurial firms that could sustain the country’s rally.
Japan’s place in the chip market
The Japanese semiconductor companies set to benefit from the rise of 5G and electric cars.
Invest in this strategy
You can invest in this strategy through the following fund(s).
Explore further
Curious to learn more about our products and what we can offer you? Please get in touch.
How to invest in this strategy
You can invest in this strategy through the following fund(s).
Explore further
Curious to learn more about our products and what we can offer you? Please get in touch.
Important information
Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK clients and is authorised and regulated by the UK Financial Conduct Authority. Baillie Gifford Overseas Limited is not licensed under the Regulation of Investment Advising, Investment Marketing and Portfolio Management Law, 5755-1995 (the “Advice Law”) and does not carry insurance pursuant to the Advice Law.
Baillie Gifford Overseas Limited markets and distributes Baillie Gifford’s range of collective investment schemes to Qualified Clients and Qualified Investors in Israel, as listed in the First Addendum to the Regulation of Investment Advising, Investment Marketing and Portfolio Management Law, 5755-1995 (the “Advice Law”) and in the First Addendum to the Israel Securities Law, 5728-1968 (the “Securities Law”). Detailed disclosure of the collective investment schemes can be found within this website and in the relevant scheme prospectus.
Baillie Gifford Overseas Limited does not provide investment advice. If you are in any doubt about whether an investment is suitable, you should seek independent advice.
No action has been or will be taken in Israel that would permit a public offering or distribution of the Funds mentioned in this website to the public in Israel. This website and the Funds mentioned herein have not been approved by the Israeli Securities Authority (the “ISA”). In addition, the Funds mentioned in this website are not regulated under the provisions of Israel’s Joint Investment Trusts law, 5754-1994 (the “Joint Investment Trusts Law”). This website and the Funds mentioned herein will only be distributed to Israeli residents in reliance on an exemption from any advice or marketing restrictions [in a manner that will not constitute “an offer to the public” under sections 15 and 15a of]/[in reliance on an exemption from the prospectus requirements under] the Israel Securities Law, 5728-1968 (the “Securities Law”) or the Joint Investment Trusts Law, and any guidelines, pronouncements or rulings issued from time to time by the ISA as applicable.