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[ BAILLIE GIFFORD ]
The qualities that give the best companies their advantage are not
always obvious. Praveen Kumar, manager of Shin Nippon Investment
Trust and deputy manager of the Baillie Gifford Japan Trust, outlines the
ingredients of lasting success
Japan’s cutting edge
The value of your investment and
any income from it can go down
as well as up and as a result your
capital may be at risk.
I
t’s 40 years since the Sony
Walkman transformed forever
the way we listen to music and
interact with the world. It’s been
so long since Japan produced a device
recognised universally as cool that
many assume that its manufacturers
have lost competitive edge to their
Chinese or South Korean counterparts.
Nothing could be further from the
truth.
Away from the big ‘old-world’
electronics and car companies, over
time Japanese firms have shifted to
specialising in niche areas. There
they have become world-beaters.
Sustaining a market advantage
means being adaptable and Shin
Nippon seeks out companies capable
of change. Identifying them involves
constant reading and discussion with
TRUSTNET
many sources, and knowing how this
or that industrial trend has taken
root in the US or the UK and might
apply to Japan. It involves thinking
creatively about where the next
wave of disruption might come from
and predicting the likely course of
rapidly-changing industries.
The companies we discover through
this process tend to be fast-growing
and disruptive. They are often run
by young, dynamic entrepreneurs, or
by a founding family which retains a
big stake.
Away from the big ‘old-
world’ electronics and
car companies, over time
Japanese firms have shifted
to specialising in niche
areas. There they have
become world-beaters
trustnet.com