Chern-Yeh Kwok

This compares favourably against the company’s benchmark, outperforming the Topix, which returned +24.8%.

The company’s share price total return over the same timeframe was 35.2%.

Since a change of mandate in October 2013, to a Japan-only equities strategy, the company has delivered a NAV total return of 133.0%, compared to a benchmark total return of 105.2%, (in sterling terms).

The company’s revenue return per share for the financial year was 6.57p (2020 - 8.08p). An interim dividend of 6.0p has already been declared and paid.

The board proposes a final dividend of 9.0p, making a total dividend of 15.0p (2020 - 15.0p) for the year ended 31 March 2021, in line with the Company’s enhanced dividend policy which was introduced for the year ended 31 March 2020.

Karen Brade, chair, Aberdeen Japan Investment Trust PLC, said: “The company’s share price and net asset value have both outperformed the benchmark by a significant margin, reaffirming the Manager’s strategy of selecting well-run businesses with proven management. The company’s net asset value total return in sterling terms for the year to 31 March 2021 was 33.5%, a strong gain compared with the Topix benchmark’s total return of 24.8%.

“The Ordinary Share price total return was 35.2% as the discount to NAV narrowed to 9.9% at 31 March 2021 (2020 - 10.9%). Since the change of mandate to a Japan-only equities strategy in October 2013, the company has delivered a NAV total return of 133.0%, compared to a benchmark total return of 105.2%, again in sterling terms.

“Over the past 12-months, Japan’s indices have risen nearly 25% and have broken out of the ranges which have shackled them for years. The domestic market has benefited from a strong response to the virus itself, well-known Japanese technological innovation, which has been a key aspect of business transition this past year, and a stable political backdrop. Moreover, as recovery has increasingly started to take hold, Japan’s leveraged position to global trade has been a strong factor in attracting foreign fund flows.

“The company’s managers have faced the challenging task of working out which companies would firstly survive, and then thrive, as events have unfolded, but their local presence and in-house research capability has provided a clear edge in determining the likely winners from this crisis, notably those with leading e-commerce or digital solution capabilities.”

Commenting on the company’s outlook, Chern-Yeh Kwok, co-manager of Aberdeen Japan Investment Trust, added: “Looking ahead, favourable fundamentals and a recovery in global trade should provide some tailwinds for Japanese equities, while improving governance should drive greater shareholder value. Some trends during the pandemic are likely to remain; for example, the move to increased working from home, and the increasing shift of retail to online models.

“This is clear when we look across the Asia Pacific region where economies have reopened and social and business activities have resumed, although some habits formed during shutdowns persist.

“Businesses that have delayed expansion plans seem to be making up for lost time, resulting in a broad based pick-up in corporate capital expenditure; there is pent-up demand not only from last year’s business disruption, but also from the geopolitical uncertainty witnessed in the year before due to US/Chinese trade tensions.

“There are, however, risks in this scenario: valuation disparities have widened amid rising imported cost inflation; geopolitical tensions remain a challenge; and the anticipated global recovery is likely to be uneven, given the sharp disparities between countries in Covid-19 vaccination rates and the consequent ability to control the social and economic impact of high levels of virus transmission.”

He continued: “From an investment perspective, we have kept our focus on and commitment to improving your company’s portfolio through these turbulent times. This includes our continued focus on well run businesses that are leaders in their segments, and that are linked to longer-term structural changes in society.

“Our diligence in carrying out proprietary research and our continued discussions around improving governance and good ESG credentials has, to date, yielded success; the results of many of the underlying companies held in the company reaffirm our investment choices, which should position your company well for a global economy which may well be on the cusp of recovery.”