Baillie Gifford Japan ditches “small holding” in Olympus

The £128.2m Baillie Gifford Japan investment trust dropped fraud-hit camera maker Olympus as part of the changes made to the portfolio by manager Sarah JM Whitley in recent months.

The trust’s financial results for the six months to February 29 show Whitley sold five stocks, including a “small holding” in Olympus, and bought four companies during the period in question.

Olympus was hit by accounting fraud allegations at the end of last year, when ousted chief executive Michael Woodford raised questions about mergers and acquisitions deals that had been used to cover losses at the company.

The Baillie Gifford Japan trust’s acquisitions over the six months included lighting fixture company Endo Lighting, price comparison site owner Kakaku, transportation conglomerate Fuji Heavy Industries and a real estate investment trust that specialises in logistics.

“Turnover has remained low at less than 10% of the portfolio and we have continued to invest nearly all the borrowings in the market, which was helpful for performance over the period,” Whitley says.

The trust’s results show that it underperformed the TOPIX total return index over the six months, as net asset value per share rose by 3% compared with a 5.7% gain in the benchmark.

Holdings such as Japan Tobacco and Isuzu Motors were the strongest contributors to performance over the period, while share price weakness was seen among internet retailer Start Today and mobile phone gaming firm Gree.