REG-Fidelity Japan Trust Plc: Annual Financial Report
27/03/2025 07:15
FIDELITY JAPAN TRUST PLC
Final Results for the year ended 31 December 2024
Financial Highlights:
* During the year ended 31 December 2024, Fidelity Japan Trust PLC (“the
Company”) reported a Net Asset Value (NAV) total return of -1.8% while the
Reference Index, the TOPIX Total Return Index (in sterling terms), rose
+10.0%.
* Over the same period, the ordinary share price total return of the Company
was -5.7%.
* Following news of the retirement of Nicholas Price at the end of 2025, his
Assistant Portfolio Manager, Ying Lu, will become the Portfolio Manager of the
company with effect from 1 October 2025.
* The Board is proposing an unconditional tender offer of 100% of the
Company’s issued share capital following the three years to 31 December
2027.
Contacts
For further information, please contact:
George Bayer
Company Secretary
0207 961 4240
FIL Investments International
CHAIRMAN’S STATEMENT
I am pleased to present the Annual Report of Fidelity Japan Trust PLC for the
year ended 31 December 2024. However, it is disappointing to report that it
proved to be another difficult year for the investment style of the Company
notwithstanding a positive return for the overall market. The TOPIX Total
Return Index (the Reference Index) rose by 10.0% over the year in sterling
terms. By comparison, the Company’s net asset value (NAV) fell by 1.8% over
the year and the share price fell by 5.7% reflecting a widening in the
discount at which the shares are traded. This now means that the three and
five year returns for the Company are disappointingly behind the Index and
have also lagged competitor funds.
The Company has an all-cap mandate and Nicholas Price, your Portfolio Manager,
is not constrained by size or style and can invest across the range of
Japanese companies. However, the decision to be overweight in small and
mid-cap growth companies, where research is rewarded and where Nicholas and
the highly experienced Fidelity team have historically found many of the best
opportunities, contributed significantly to the underperformance. The change
in interest rates damaged valuations in this part of the market and there were
some flaws in stock-picking, as evidenced by the disappointing earnings
results from some of the companies involved in the factory automation sector.
Illustrative of the challenges of being a growth orientated manager in Japan,
it is interesting to note that the MSCI Japan Value Index has risen by 42.2%
in sterling terms over the three years to 31 December while the MSCI Japan
Growth Index has fallen by 3.7% over the same period.
DISCOUNT MANAGEMENT, SHARE REPURCHASES AND TREASURY SHARES
The Board has an active approach to discount management, the primary purpose
of which is to reduce discount volatility. Over the course of the year,
10,828,535 ordinary shares were repurchased for holding in Treasury, at a cost
of £18,857,000. This represented 8.0% of the issued share capital of the
Company as at 31 December 2024 and added 1.3% to the NAV total return for the
year. Subsequent to the year end and up to the latest practicable date of this
report, the Company has repurchased a further 1,532,679 shares at a cost of
£2,676,000. Historically, shares bought back were held in Treasury and could
be issued at a later date should the share price move to a premium to NAV per
ordinary share. As the number of shares held in Treasury equated to 15% of the
issued share capital by 20 January 2025, shares repurchased since then have
been cancelled.
While we would like to see our share price discount to NAV in single figures,
discounts have remained wide across the whole investment companies’
universe, averaging 14.7% at the end of 2024. The Company’s shares began the
year under review at a 9.5% discount and ended it at 13.1%.
At the forthcoming Annual General Meeting (AGM) on 21 May 2025, the Board is
seeking to renew the annual authority to repurchase up to 14.99% of the
Company’s shares, to be either cancelled or held in Treasury, as it has done
each year previously.
A sustained reduction in the discount of the Company is only likely if broad
investor interest in Japan continues to increase and the investment
performance recovers. Meanwhile, the Board and the Manager will continue their
efforts to raise the Company’s profile and promote the investment
opportunities in the Japanese equity market.
ONGOING CHARGES RATIO
The ongoing charges ratio for the year, including the variable element, is
0.83% (2023: 0.84%). This comprises a fixed charge of 1.03% (2023: 0.99%) and
a variable credit of 0.20% (2023: 0.15%), the maximum refund under the
variable fee arrangement. The variable management fee credit is due to the
Company’s underperformance in comparison to its Reference Index on a rolling
three-year basis.
The Board believes that the variable fee arrangement whereby the Manager is
rewarded for outperformance, but shareholders are rebated if the portfolio
underperforms, is a significant corporate governance benefit for investors.
GEARING
The Board continues to believe that gearing is a distinct advantage of the
investment trust structure and will benefit the performance of the Company.
The Company’s use of long Contracts for Difference (CFDs) is a
differentiating factor, providing more flexibility and at a low-er cost than
traditional bank debt. The level of gearing remained fairly constant in the
year under review, beginning 2024 at 23.1% and standing at 24.0% at the year
end.
UNLISTED COMPANIES
While there is authority from shareholders for the Company to invest up to 20%
of its assets in unlisted companies, the Board has limited the proportion of
the portfolio held in unlisted companies to a maximum of 10% while the IPO
market in Japan remains lacklustre.
The actual exposure to unlisted holdings at the end of the year was 6.6% of
net assets (2023: 6.3%) across a total of seven companies. This is unchanged
from last year.
Twice yearly, the Audit Committee meets specifically to review the unlisted
investments together with Fidelity’s Fair Value Committee, Fidelity’s
unlisted Asian investments specialist and representatives from Kroll, the
independent valuation specialists.
Further details can be found in the Portfolio Manager’s Review below.
DUE DILIGENCE TRIP
As detailed in the half-yearly report for the six months ended 30 June 2024,
the Board was pleased to undertake a due diligence trip to Japan last June,
spending time with the investment management and analyst teams and meeting
some of the Company’s investments with them. The visit was invaluable in
terms of giving the Board an understanding of the depth of analyst resources
supporting the Portfolio Manager, reinforcing the continued confidence of the
Board in Fidelity, Nicholas and the investment team around him, and
underscoring our belief that the Company will benefit when there is a market
rotation back into growth orientated stocks and some of the medium-sized and
smaller companies held in the portfolio.
BOARD OF DIRECTORS
As covered in the 2023 Annual Report, Dominic Ziegler retired from the Board
at the May 2024 AGM after nine years of excellent service. Seiichi Fukuyama
joined the Board as a non-executive Director with effect from 1 March 2024 and
was elected by shareholders at the AGM in May 2024. There have been no other
changes to the Board over the year. All five Directors will be standing for
re-election at the AGM on 21 May 2025 and their biographies can be found in
the Annual Report. Between them they have a wide range of appropriate skills
and experience and the diversity of perspectives necessary to form a balanced
Board for the Company.
ANNUAL GENERAL MEETING
Once again, we will be holding a ‘hybrid’ AGM, allowing attendance and
voting in real time online as well as in person. The AGM is a valuable
opportunity for us as a Board to engage with shareholders. Nicholas Price will
be making a presentation, considering the year under review, and outlining the
opportunities in the market and prospects for the year ahead. The Board and
Nicholas will be very happy to answer questions from shareholders attending
both in person and virtually. Japanese refreshments will be served to
attendees, and we look forward to seeing many of you there.
Further details of the AGM are set out in the Annual Report.
PORTFOLIO MANAGER CHANGE AND CONTINUATION VOTE
The Board has recently been notified that the Portfolio Manager, Nicholas
Price, plans to retire at the end of this calendar year after a 30 year career
with Fidelity in Japan. His Assistant Portfolio Manager, Ying Lu, will become
the Company’s Portfolio Manager with effect from 1 October 2025. Nicholas
will continue to work with Ying until the end of the year. Ying has been
working closely with Nicholas for the past three years and so we do not expect
any change in the approach to the investment management of the Company.
The Board continues to believe that the Fidelity investment team in Japan is
one of the best resourced in the industry. We also believe that we will see a
reversion to a market environment where the investment style of the Fidelity
team will once again generate the significant outperformance that we have seen
in the past and particularly the years ended 2019 and 2020. Illustrating how
quickly things can change, it is worth noting that in December 2024 alone, the
NAV of the Company rose by 5.2% and the share price by 5.8% against an Index
increase of 0.9%.
Notwithstanding our strong backing for Nicholas and the Fidelity team, we
recognise that continued underperformance would be unacceptable to our
shareholders. Accordingly, linked to the vote for the continuation of the
Company at the forthcoming AGM, we are proposing an unconditional tender offer
of 100% of the Company’s issued share capital (excluding shares held in
Treasury) following the three years to 31 December 2027. The tender will be at
a price close to NAV.
Shareholders may ask why the Board is recommending continuation without an
immediate cash exit after this period of underperformance. Investment
performance has an element of cyclicality, outcomes are unpredictable and
investing requires an ability to withstand the gyrations of the markets and
take a long-term view. The question for the Board and shareholders is whether
a well-resourced and experienced team with a strong historic track record
should be dismissed based on the last three years, or whether there is a
strong possibility that the current growth-oriented portfolio, highly
differentiated from the Reference Index, will emerge from its recent
trough/doldrums and deliver the sorts of returns that we and shareholders
expect. The Board has taken this view.
The tender offer will be in place for the Company’s Annual General Meeting
to be held in May 2028.
ARTICLES OF ASSOCIATION
The Board is proposing to extend the time period to draw up proposals
regarding the Company’s voluntary liquidation and/or reorganisation and hold
a general meeting at which they are submitted to members in the event of an
unsuccessful continuation vote, from three to six months. The proposed new
time period, which runs from the date of the general meeting at which the
unsuccessful vote occurs, is felt to provide a more practicable period to
allow proposals to be fully considered and to be in line with market practice.
We have also taken the opportunity to make other changes of a minor,
clarificatory or technical nature, including clarifications in relation to
hybrid general meetings to follow how practice has developed. However, the
amendments do not provide for, and the Board has no intention to move to,
fully virtual meetings. A full tracked version of all the changes proposed to
the Articles is available at www.fidelity.co.uk/japan. The principal changes
proposed to the Articles are set out in more detail in the Annual Report.
OUTLOOK
As mentioned, the Company has generated significant outperformance in the
past, and we have every reason to believe that Nicholas, Ying and the Fidelity
investment team will do so again. While underperformance is always
disappointing, it is at least understandable in times where a tried-and-tested
investment approach is at odds with the prevailing market mood. The team are
resolute in their commitment to identifying companies where the market is
underestimating or mispricing future growth, including those which may be at
an early stage of their development, and their bottom-up stock selection
approach and multi-cap focus has the full backing of the Board. Where share
prices have declined, this has only served to make low valuations even more
compelling for businesses with good long-term growth prospects.
The broadening out of the TSE reforms remains encouraging and should lead to a
clear improvement in capital efficiency and shareholder returns in companies
further down the market cap scale than those that have led the performance of
the broad Japanese market in the past two years. Meanwhile, valuations of
growth stocks remain low in historical terms and relative to other markets,
despite the Japanese market featuring many companies positively exposed to
global megatrends such as the growth of artificial intelligence. The Bank of
Japan seems committed to a return to positive interest rates, and a sustained
but modest level of inflation in both wages and prices could boost consumer
and business confidence. Another area of support for the market can be seen in
the increase in merger and acquisition activity in Japan, most notably being
the recent US$47 billion bid for convenience store operator 7-Eleven by the
Canadian company that owns rival retailer Circle K.
Your Board remains focused on ensuring the Company returns to delivering
strong investment performance and is confident that the portfolio is well
placed to benefit from this more positive outlook for the Japanese market.
DAVID GRAHAM
Chairman
26 March 2025
PORTFOLIO MANAGER’S REVIEW
QUESTION
The performance for the year under review has remained challenging given the
positive headlines of recovery in Japan. Why is that and what were the key
drivers of the Japanese stock market?
ANSWER
It is disappointing to report to our shareholders on another year of poor
performance against favourable headlines in Japan and the country being in a
new bull market, driven by corporate governance reforms, a weak yen boosting
profits and increasing activist and private equity involvement creating a more
dynamic market for corporate control. On why the Company could not capture
this beta, I would say that being on the ground in Japan, my bottom-up
approach tends to focus on relatively lesser-known growth companies, often
mid-caps with strong business models, new technology companies or those having
strong positions in emerging growth markets. By buying these companies at
cheap valuations, I am aiming to find future drivers of long-term performance
for the Company. However, the short-term attention of the market since the
2023 implementation of the Tokyo Stock Exchange (TSE) reforms has been on low
price-to-book ratio, ex-growth and old economy large-cap companies, often with
large cash balances, which can be persuaded into doing large buybacks and
increasing leverage. As this drives up short-term shareholder returns, there
has been a large allocation of capital and market capitalisation away from
growth areas of the market to companies that do not need that capital.
Thereby, while most of the companies in the portfolio have executed well in
terms of profit growth, the valuation contraction in the mid-cap segment of
the portfolio has meant that the premium paid historically for sustainable
mid-term higher return and growth companies has been effectively wiped out, at
least temporarily.
QUESTION
What were the key contributors and detractors for the performance of the
Company in the year to 31 December 2024?
ANSWER
The major contributors to performance over the year included Ryohin Keikaku,
operator of the MUJI brand of general merchandise stores. Management is
executing incredibly well, and the business is generating double-digit sales
growth domestically and in China, where a combination of internal initiatives
and macro factors are supporting a pickup in demand. In Japan, strong sales
growth, underpinned by successful new products, and price hikes are leading to
lower discounts and higher profit margins. Sanrio is a Japanese entertainment
company that sells ‘Hello Kitty and friends’ merchandise and operates
‘Hello Kitty’ theme parks. The company is ideally placed to capture the
structural growth of the Japanese character intellectual property (IP) market
and its strategies in the licensing business are working very well in both
North America and China, which contributed to an improvement in its overall
profitability. Sanrio recently upgraded its full-year guidance and I expect
the company to deliver double-digit profit growth over the next two to three
years, justifying its valuation premium. Recruit Holdings, a global media and
staffing company, made progress in improving the monetisation of its online
job-matching platform “Indeed” and that helped to offset slowing job
openings in the US. The company’s commitment to enhancing capital efficiency
and increasing shareholder returns provided further share price support. Among
financials, mega bank Mizuho Financial Group reported fiscal 2024 interim
results that exceeded consensus forecasts due to a combination of higher
interest rates, growth in non-interest income and the unwinding of cross
shareholdings. The company announced a share buyback and dividend hike
alongside its earnings release, and as a relative laggard it is starting to
catch up with its peers in terms of earnings and stock price performance.
The most significant detractors from performance over the 12-month review
period included Mitsui High-tec, a leading supplier of hybrid/EV motor cores
and leadframes, which is an essential component that connects semiconductor
chips and external circuitry. Prolonged inventory adjustments of leadframes
and sluggish demand for motor cores prompted the company to announce a
downward revision to its full-year earnings forecast. However, leadframes
appear to be at the bottom of the cycle and renewed growth in the motor core
segment, supported by further hybrid penetration, is expected to lead to a
recovery in earnings and a rerating from its current 10x price-to-earnings
level. Harmonic Drive Systems, a leading manufacturer of mechatronic drive
systems and precision gears for industrial robots, negatively revised its
fiscal 2024 earnings guidance due to the slow pace of recovery in the factory
automation (FA) sector, which reflects protracted inventory destocking. We
retain our view that a sequential improvement in orders and an upturn in
valuations will take place in 2025. Funeral services operator Kosaido Holdings
was a strong performer in 2023 but faced profit taking at the start of the
review year. Its share price came under further pressure following the
resignation of its President and CEO, Hiroshi Kurosawa. Despite the change in
management, we expect the company’s efforts to expand capacity and maximise
its existing crematorium facilities to support future earnings growth. Given
the largely predictable nature of the funeral business cash flows, we believe
that it is substantially undervalued versus other similar listed businesses.
Bicycle component maker Shimano negatively revised its full-year profit
forecasts due to currency losses. However, inventory adjustments were expected
to finish by year-end and demand in key markets is set to normalise.
The ten highest stock contributors and detractors to the NAV total return on a
relative basis are shown in the Annual Report.
QUESTION
How has the Company’s portfolio changed over the period? Are there any
sectors in which you are particularly interested?
ANSWER
Against this backdrop, the task has been to continuously re-test arguments for
holding every name in the portfolio and selling those that do not exhibit the
excellent execution/valuation anomalies that underpin our investment approach.
I believe that these future drivers of performance will work when fundamentals
reassert themselves. In the short-term, the market is a voting machine but
over the longer-term it is a weighing machine, and cheap mid-cap growth with
favourable fundamentals will find favour again. As such, I expect a clear mean
reversion in the performance of mid-cap companies, which account for around
50% of the Company’s active weight.
With the guidance of the Board, I have also placed renewed emphasis on the
Company being an all-cap portfolio that will do well even if a large-cap
market continues to dominate. I have re-allocated the capital from names that
did not meet our criteria to larger-cap growth names such as Recruit Holdings
and Ajinomoto in the food sector. Given the interest rate regime change in
Japan, I have also added to financials names such as Sompo Holdings and Mizuho
Financial Group. This has created a better sectoral balance in the portfolio,
while maintaining an 80% (ungeared) active money ratio but having around half
of the portfolio in larger caps. In this way, I anticipate that we will be
able to deliver better performance in a large-cap dominated market and still
maintain the ability to outperform strongly when the market favours stocks
further down the market-cap scale through our core bottom-up stock picking
process.
QUESTION
Tokyo Stock Exchange (TSE) initiatives for corporate reform have initially
been concentrated in large-cap companies. What are your expectations for
growth names and mid-cap companies in 2025?
ANSWER
So far, the highest disclosure rates have been concentrated in large-cap, low
price-to-book companies in sectors including banks, shipping, utilities and
commodities. However, the TSE-led reforms are broadening out across the
market. Through our engagements, we are seeing growth and mid-cap companies
becoming more active in their shareholder returns. Given that mid/small-caps
have a large presence both in absolute numbers and the proportion that trade
below book value, there are grounds for optimism.
Many mid/small-cap companies have solid balance sheets with high net cash to
market capitalisation ratios, which means that they can easily conduct share
buybacks to improve their returns on equity (RoE). As we have already seen
among larger companies, higher rates of disclosure translate into better share
price performance, and in 2025 mid/small-caps are likely to emulate these
trends.
From a valuation perspective, Japanese mid/small-caps are trading at a steep
price-to-book discount to the larger-cap indices and have lost the
price-earnings premium that was a constant feature of the past decade or so.
As we have seen in the past, when the valuation cycle widens to such an
extreme level, it tends to snap back and compliance with the TSE reforms can
prompt this.
Interestingly, in addition to a rise in share buybacks, we are seeing a clear
increase in corporate activity through management buyouts, tender offers and
mergers and acquisitions (M&A) more broadly. As noted by KKR founder Henry
Kravis, Japan has more than 3x the number of listed subsidiaries than the US
and more than half of the listed companies trade below book. There is also an
increased focus on the need to accelerate the unwinding of cross
shareholdings. In a historically overcapitalised market, where there is a
clear drive to improve capital efficiency and restructure balance sheets, this
trend of de-equitisation is positive for the mid-to-long term outlook.
Question
What engagements did you conduct over the year?
Answer
In 2024, the engagement team in Tokyo, led by our Head of Engagement,
conducted 100 meetings (in addition to our fundamental research meetings),
covering 22 names held by the Company. Against a backdrop of increasing
governance reform under the auspices of the TSE, the majority of the
engagements were focused on governance, capital allocation and long-term
strategy.
In terms of specific engagements with investee companies, we worked with Riken
Keiki, a world leader in gas detectors, to develop its capital strategy and
tackle its low price-to-book ratio. The company has an excellent business
model with stable long-term profit and free cashflow growth among Prime
companies, but its price-to-book ratio is low, and the denominator of returns
on equity (RoE) is inflated due to excessive equity capital in pursuit of
stability, resulting in poor capital efficiency. The company understands the
points raised and is preparing to respond to the TSE. We requested the company
to strengthen its investor relations (IR) activities, especially to increase
the number of IR meetings from twice a year to avoid inadvertent
underperformance of the stock price.
In September, our engagement team met with a senior managing director from
Uyemura, a niche mid-cap chemicals company focused on cutting edge plating for
printed wiring boards and electronic components used in smartphones and cars,
to follow up on an earlier meeting in 2023. The company has high margins,
strong cashflow generation capabilities, and large cash balances, but a low
third-party rating and low capital efficiency are impacting its valuation. The
company has shown tangible progress and enhanced its governance checks, for
example by creating a nomination & renumeration committee, as well as
increasing buybacks. We believe that Uyemura’s initiatives are better than
disclosed and with time and enhancements to their disclosure, this can improve
further.
Around the same time, we engaged with industrial electronics company
Mitsubishi Electric. In terms of its business strategy, we discussed the
company’s efforts to implement structural changes, moving from a pure
hardware player to a software and solutions provider, and bridge the
profitability gap with its US and European peers. We explained that the
current level of disclosure is insufficient to accurately gauge its progress
on reforms and that information at a segmental level would enable investors to
assess the capital efficiency of its various businesses and thereby attain a
holistic view of its overall portfolio. On the governance side, we spoke about
the need to address the company’s cross shareholdings and the low valuations
of its listed subsidiaries. Management agreed and it was reassuring to hear
that they had identified the same issues internally. At the same time, we
encouraged the company to establish a clear dividend policy given its ability
to generate stable free cashflows, a move that would provide reassurance to
investors should the cyclical environment change.
Question
What is your approach to gearing? And what impact did it have on returns
during the year?
Answer
The level of gearing was little changed over the year and closed the year at
24.0% (versus 23.1% at the end of 2023). If we see a sustained uptrend in
Japanese stocks, then I would be inclined to reduce the level of gearing
employed. However, I am happy with where market valuations currently stand,
and the leverage is deployed in stable growth companies rather than high beta
names. So, overall, I am comfortable with the Company’s current positioning.
Over the course of 2024, the CFDs had a modest positive impact on absolute
returns, notably through the exposure to speciality retailer Ryohin Keikaku
and HR company Recruit Holdings.
Question
How has the Company’s exposure to unlisted companies changed during the year
under review?
Answer
As always, we continue to evaluate new opportunities, while maintaining a
disciplined approach towards valuations. At the end of the review period, we
continued to hold seven unlisted names, representing 6.6% of net assets. While
there were no changes during the review period, we expect specific unlisted
companies held in the portfolio to list in 2025.
Question
There are many geopolitical uncertainties in 2025. What will you be focusing
on in the year ahead?
Answer
Turning to the outlook for 2025, there are many geopolitical uncertainties and
unknowns, so I am focusing stock selection based on individual company’s
self-reliance and growth drivers, and where the market is substantially
mis-pricing the growth potential. Ryohin Keikaku, which runs the MUJI brand,
is one such stock. Under a new management team, it has substantially
transformed its marketing and development and internal management systems, and
with successful products starting to emerge, it has substantial room to
increase profitability as it ramps up changes to its supply chain management.
Our internal estimates are substantially ahead of the street and the stock
trades at around half the multiple of its domestic counter parts such as Fast
Retailing (Uniqlo) despite faster growth, leaving significant upside potential
for the stock in the year ahead. Another example is Recruit Holdings, which
owns a job platform called “Indeed”. The key catalyst for Recruit as a
dominant global job platform with pricing power is to raise its take rate from
the current low 1% to 2-3% over the mid-term, which would substantially boost
its earnings outlook versus consensus. Among mega-cap financials, insurer
Sompo Holdings with better balance sheet management is offering an 8% total
shareholder return and remains very discounted to its global and domestic
peers.
Within the mid-cap space, many double-digit growers – such as Kosaido
Holdings (funerals), Mizuno (sports) and Premium Group (auto finance) – are
all trading at deeply discounted price-to-earnings valuations and are
potential sources of future performance as their earnings growth continues to
come through. One top active position is Osaka Soda whose performance was poor
in 2024 after strong gains in 2023. We think the market is underestimating the
potential of its silica gel which is used in the GLP-1 market for obesity
drugs. The company will also benefit when generics start to appear from 2026
and massively increase the size of the branded drugs market.
I would also add that I expect some of the unlisted companies held in the
portfolio to list in 2025, which may offer some upside versus their current
assessed valuations. In particular, I would highlight the position in GO Inc,
the largest taxi ride hailing app in Japan with 75% market share, which is
growing rapidly and recently announced an exclusive tie up with Waymo in
self-driving taxis in Japan.
Question
The Company’s underperformance compared to the Reference Index this year and
over the longer-term is disappointing for shareholders. What have been the key
drivers and what are your expectations for the coming months?
Answer
What can we learn from looking at past performance? From January 2019 to
January 2022, the Company’s cumulative relative return was up by 45% but
from January 2022 to December 2024 it was down by 35% relative to the market,
giving up most of the gains from the previous three years. In the first
period, an overweight exposure to the cyclical technology sector, which
enjoyed a post-COVID boom, and bottom-up stock selection generally added a lot
of value. The main detractors were more expensive internet-related names,
which did well at the beginning of the pandemic but declined afterward
especially as valuation multiples came down.
Turning to the second period, bottom-up stock selection was broadly negative,
as was sector selection (especially being underweight in banks and insurance).
In terms of stock selection, there were two main buckets of underperformance:
China-related factory automation (FA) companies and small-cap internet-related
names that experienced a contraction in their valuation multiples. Where are
we now with this? For the names that I continued to hold in the internet
space, such as Raksul, the valuations are in line with the market despite
their much higher earnings growth rates, so the upside/downside risks are now
skewed to the upside. Similarly, for FA names such as MISUMI Group, most of
them have re-oriented their businesses away from China over the last two years
to other Asian countries, and to the US, and are growing again. They remain
under-owned and offer an attractive risk-reward balance for 2025.
In this second period and looking specifically at 2024 performance, stock
selection was negatively impacted by weaker sentiment towards the FA space and
the recovery potential for names such as Harmonic Drive Systems, as well as
Mitsui High-tec in the automobile sector. These factors negated the strong
performance of some of the unique names in the portfolio, such as Sanrio
(anime characters) and Yonex (sports equipment). Our analysis shows that most
of the underperformance was due to temporary one-off issues and that the
companies are already recovering as we enter 2025. As such, they are
worthwhile retaining to enjoy a large upside potential to mid-term earnings
from hybrid cars for Mitsui High-tec and a recovery in the robot market and
the growth of humanoid robots for Harmonic Drive Systems.
As detailed above, reorientating the portfolio further towards an all-cap
focus, I have increased the Company’s positions in high-conviction names
such as Ryohin Keikaku (MUJI) and Olympus (endoscopes) by using the proceeds
from selling some of the older poorly performing positions (Kansai Paint and
Oriental Land) and some profit taking in strong performers (Tokyo Electron and
other semiconductor-related names), and combined with a more diversified
sector allocation, I am confident that this will pay off in better performance
in 2025.
NICHOLAS PRICE
Portfolio Manager
26 March 2025
Strategic Report
Principal Risks and Uncertainties and Risk Management
As required by provisions 28 and 29 of the 2018 UK Corporate Governance Code,
the Board has a robust ongoing process for identifying, evaluating and
managing the principal risks and uncertainties faced by the Company, including
those that could threaten its business model, future performance, solvency or
liquidity. The Board, with the assistance of the Alternative Investment Fund
Manager (FIL Investment Services (UK) Limited/the “Manager”), has
developed a risk matrix which, as part of the risk management and internal
controls process, identifies the key existing and emerging risks and
uncertainties that the Company faces. These are set out below.
The Manager also has responsibility for risk management for the Company. It
works with the Board to identify and manage the principal and emerging risks
and uncertainties and to ensure that the Board can continue to meet its UK
corporate governance obligations.
The Board considers the risks listed below as the principal risks and
uncertainties faced by the Company.
Principal Risks Mitigation
Geopolitical Risk The Board is provided with a detailed investment review which covers material economic, market and legislative changes at each Board meeting as well as receiving periodic updates from economic and political commentators in the region. Although it is
Geopolitical risk is the potential for political, socio-economic and cultural events, trends and developments to have an adverse effect on the Company’s assets. In Asia, the key geopolitical risks stem from China and the tensions with the United States over trade and the future of Taiwan; and the potential of North Korean aggression and its impact on the region. In addition, there is threat from the new administration of President Trump that significant tariffs may be introduced on certain Japanese imports, including autos. Elsewhere, there is increased global economic uncertainty from the ongoing war in Ukraine and continued conflict in the Middle East. unclear how long the war in Ukraine and the temporary ceasefire in the Middle East conflict will last amid evolving foreign policies for crisis talks sparked by President Trump’s administration, the direct impact for Japan is not significant. The impact on
the Company’s portfolio of holdings is also relatively limited. However, the ramifications of a global downturn could have a significant impact on the Japanese economy. The Portfolio Manager’s Review above provides further detail on some of the risk
factors.
Investment Performance and Gearing Risks The Portfolio Manager is responsible for actively monitoring the portfolio selected in accordance with the asset allocation parameters and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The emphasis is on long-term results
The portfolio is actively managed and performance risk is inherent in the investment process. The achievement of the Company’s investment performance objective relative to the market requires the taking of risk, such as strategy, asset allocation and stock selection, and may lead to NAV and share price underperformance compared to the Reference Index. The portfolio has unlisted investments which, by their very nature, involve a higher degree of valuation and performance uncertainties, liquidity risks and possible delays in listing until market conditions are favourable. as the Company is more exposed to volatility in the shorter-term. The Board closely monitors the valuations of the unlisted investments through the Manager’s Fair Value Committee, which includes input from Fidelity’s analysts covering the unlisted
companies as well as Fidelity’s unlisted investments specialist. In addition, advice is obtained from a third-party valuation specialist company (Kroll). Details of the unlisted investments valuation process is in in the Annual Report. The Board sets
limits and guidelines for the Portfolio Manager as to how much of the Company’s net assets can be held in unlisted securities. The limit approved by shareholders is 20% of net assets. As at 31 December 2024, the Company’s unlisted investments represented
6.6% of net assets.
The Company has the option to make use of loan facilities or to use CFDs to invest in equities. The principal risk is that the Portfolio Manager may fail to use gearing effectively. Other risks are that the cost of gearing may be too high or that the term of the gearing is inappropriate in relation to market conditions. The Company gears through the use of long CFDs which are currently cheaper than bank loans and provide greater flexibility. The Board regularly considers the level of gearing and gearing risk and sets limits within which the Portfolio Manager must operate.
Natural Disaster Risk Whilst natural disasters cannot be averted, the Board is comfortable that the Manager has a robust business continuity plan in place.
Japan is extremely vulnerable to earthquakes and tsunamis. Depending on the magnitude of such events, positions in the portfolio may be affected. The Manager could also be impacted from an operational perspective if the epicentre is in or near Tokyo.
Market, Economic and Currency Risks These risks are somewhat mitigated by the Company’s investment trust structure which means no forced sales will need to take place to deal with any redemptions. Therefore, investments can be held over a longer time horizon. Risks to which the Company is
The Company’s assets consist mainly of listed securities. Therefore, its principal risks include market related risks such as market downturn, interest rate movements, deflation/inflation and exchange rate movements. The Portfolio Manager’s success or failure to protect and increase the Company’s assets against this background is core to the Company’s continued success. Most of the Company’s assets and income are denominated in yen. However, the functional currency of the Company in which it reports its results is sterling. Consequently, it is subject to currency risk on exchange rate movements between the yen and sterling. exposed in the market risk category are included in Note 16 to the Financial Statements below together with summaries of the policies for managing these risks. It is the Company’s policy not to hedge against currency risks. Further details can be found in
Note 16 to the Financial Statements below.
Competition Risks and Marketplace Threats The Board, the Company’s Broker and Manager closely monitor industry activity and the peer group, and an annual review of strategy is undertaken by the Board, to ensure that the Company continues to offer a relevant product to shareholders.
There are increased threats facing the Company within the current market environment of increased mergers and acquisitions activity. Other external pressures include the Company’s ability to maintain and grow the business, and a loss of shareholders if the demand for investment trusts decline and the demand for passive funds and holistic/digital finance offerings continue to increase.
Discount Control and Demand Risks The market value of the Company’s shares and its discount to NAV are factors which are not wholly within the Board’s total control. The Company’s share price, NAV and discount volatility are monitored daily by the Manager and the Company’s Broker and
There is a risk that the Company’s shares trade at a persistent and significant discount to the NAV. considered by the Board regularly. The Board endeavours to exercise some short-term influence over the discount through share repurchases, but it can prove challenging if market sentiment is not supportive of Japanese equities.
There is a risk that the demand for the Company’s shares may fall due to poor performance, changes in investor sentiment and attitudes towards investment in Japan. The demand for shares is influenced by the appeal of Japanese markets and through good performance and an active investor relations program. The Board reviews analysis of the shareholder register at each Board meeting which allows the Board to monitor the
relevance of the Company’s mandate to shareholders and remain abreast of market sentiment.
Key Person Risk The Manager identifies key dependencies which are then addressed through succession plans. Fidelity has succession plans in place for portfolio managers. The Board meets regularly with the Portfolio Manager and key members of the investment team to gauge
The loss of the Portfolio Manager or other key individuals could lead to potential performance, operational or regulatory issues. There is a risk that the Manager has an inadequate succession plan for key individuals, particularly the Portfolio Manager with stock selection expertise in Japanese markets. any dissatisfaction or potential flight risk. The investment team in Japan work closely in a collaborative manner and fully understand the investment approach of the Portfolio Manager.
Legislation, Taxation and Regulatory Risks Regulatory changes for investment companies are monitored regularly by the Board and managed through active engagement with regulators and trade bodies by the Manager and also by the AIC.
There is a risk that the changes in legislation, taxation, regulation or other external influence that require changes to the nature of the Company’s business. A breach of Section 1158 of the Corporation Tax Act 2010 by the Company could lead to a loss of investment trust status, resulting in the Company being subject to tax on capital gains.
Recently, there have been increased concerns around investment cost disclosures and its impact in the industry. The Government and regulator have announced a temporary exemption for investment companies from the EU cost disclosure requirements.
Business Continuity Risk The Manager continues to take all necessary and reasonable steps to assure operational resilience and to meet its regulatory obligations, assess its ability to continue operating and the steps it needs to take to support its clients, including the Board,
There continues to be increased focus from financial services regulators around the world on the contingency plans of regulated financial firms. The top risks globally are cybersecurity, geopolitical events, outages, fire events and natural disasters. There are also ongoing risks from the war in Ukraine and conflict in the Middle East, specifically regarding cyberattacks and the potential loss of power and/or broadband services. and has an appropriate control environment in place. The Manager has provided the Board with assurance that the Company has appropriate operational resilience and business continuity plans and the provision of services has continued to be supplied without
interruption. Risks associated with these services are generally rated as low, but the financial consequences could be serious, including reputational damage to the Company. These are mitigated through operational resilience frameworks and subject to a
risk-based programme of risk oversight and internal audits by the Manager. The Manager’s internal controls reports are received by the Board on an annual basis and any concerns are investigated.
The Company relies on a number of third-party service providers, principally the Registrar, Custodian and Depositary. They are all subject to a risk-based programme of risk oversight and internal audits by the Manager and their own internal controls reports are received by the Board on an annual basis and any concerns are investigated. The third-party service providers have also confirmed the implementation of appropriate measures to ensure no business disruption.
Cybercrime and Information Security Risks The Manager’s technology risk management teams have developed and implemented a number of initiatives and controls in order to provide enhanced mitigating protection to this ever-increasing threat, and also potentially addressing the risks of AI. The risks
The operational risk and business impact from heightened external levels of cybercrime and the risk of data loss is significant. Cybercrime threats evolve rapidly. A cyberattack could result in the loss of confidential information or cause a significant disruption to the Company’s operations. Risks also remain due to military conflicts and geopolitical tensions, including the war in Ukraine and conflict in the Middle East and the trend to more working from home following the pandemic. These primarily relate to phishing, ransomware, remote access threats, extortion and denial-of-services attacks, threats from highly organised criminal networks and sophisticated ransomware operators. are continuously re-assessed by Fidelity’s information security teams and risk frameworks are continuously enhanced with the implementation of additional tools and processes, including improvements to existing ones. Fidelity has dedicated cybersecurity and
technology teams which provide continuous oversight, regular awareness updates and best practice guidance. The Board receives regular updates from the Manager in respect of the type and possible scale of cyberattacks. The Manager has dedicated detect and
respond resources specifically to monitor the cyber threats associated within the workplace and there are a number of mitigating actions in place, including control strengthening, geo-blocking and phishing mitigants, combined with enhanced resilience and
recovery options. The Company’s third-party service providers are also subject to oversight and provide assurances and have similar control measures in place to detect and respond to cyber threats and activity.
Environmental, Social and Governance (ESG) Risks Whilst Fidelity considers ESG factors in its investment decision-making process, the Company does not carry the label. ESG integration is carried out at the fundamental research analyst level within its investment teams, primarily through Fidelity’s
There is a risk that the value of the assets of the Company are negatively impacted by ESG related risks, including climate change risk from extreme weather events. Japan has a material exposure to earthquakes. This may impact global supply chains for companies and customers. ESG risks also include investor expectations and how the Company is positioned from a marketing perspective. Proprietary Sustainability Rating which is designed to generate a forward-looking and holistic assessment of a company’s ESG risks and opportunities based on sector-specific key performance indicators. The Portfolio Manager may consider the effects of ESG
when making investment decisions. ESG ratings of the companies within the Company’s portfolio compared to ESG ratings of the companies within the Company’s portfolio compared to the MSCI ratings are provided in the Annual Report.
Continuation Vote
A continuation vote takes place every three years and the next continuation
vote will take place at the AGM on 21 May 2025. There is a risk that
shareholders do not vote in favour of continuation of the Company during
periods when performance of the Company’s NAV and the share price is poor.
This is addressed in further detail in the Going Concern Statement below.
Emerging Risks
The Audit Committee continues to identify any new emerging risks and take any
action necessary to mitigate their potential impact. The risks identified are
placed on the Company’s risk matrix and graded appropriately. This process,
together with the policies and procedures for the mitigation of existing and
emerging risks, is updated and reviewed regularly in the form of comprehensive
reports by the Audit Committee. The Board determines the nature and extent of
any risks it is willing to take in order to achieve the Company’s strategic
objectives.
Climate change, which refers to a large scale shift in the planet’s weather
patterns and average temperatures, continues to be a key emerging as well as a
principal risk confronting asset managers and their investors. Globally,
climate change effects are already being experienced in the form of changing
weather patterns. Extreme weather events can potentially impact the operations
of investee companies, their supply chains and their customers. The Board
notes that the Manager includes ESG considerations, including climate change,
into the Company’s investment process. The Board will continue to monitor
how this may impact the Company as a risk to investment valuations and
potentially affect shareholder returns.
The Board, together with the Manager, is also monitoring the emerging risks
posed by the rapid advancement of artificial intelligence (AI) and technology
and how it may threaten the Company’s activities and its potential impact on
the portfolio and investee companies. AI can provide asset managers powerful
tools, such as enhancing data analysis risk management, trading strategies,
operational efficiency and client servicing, all of which can lead to better
investment outcomes and more efficient operations. However, with these
advances in computing power that will impact society, there are risks from its
increasing use and manipulation with the potential to harm, including a
heightened threat to cybersecurity.
Other emerging risks may continue to evolve from unforeseen geopolitical and
economic events.
VIABILITY STATEMENT
In accordance with provision 31 of the 2018 UK Corporate Governance Code, the
Directors have assessed the prospects of the Company over a longer period than
the twelve month period required by the “Going Concern” basis. The Company
is an investment trust with the objective of achieving long-term capital
growth. The Board considers that five years is an appropriate investment
horizon to assess the viability of the Company, although the life of the
Company is not intended to be limited to this or any other period.
In making an assessment on the viability of the Company, the Board has
considered the following:
· The ongoing relevance of the investment objective in prevailing market
conditions;
· The Company’s level of gearing;
· The Company’s NAV and share price performance compared to its Reference
Index;
· The principal and emerging risks and uncertainties facing the Company and
their potential impact as set out above;
· The future demand for the Company’s shares;
· The Company’s share price discount to the NAV;
· The liquidity of the Company’s portfolio;
· The level of income generated by the Company;
· Future income and expenditure forecasts; and
· The Company will offer its shareholders a continuation vote at the AGM on
21 May 2025.
The Company underperformed the Reference Index over the five year reporting
period to 31 December 2024, with a NAV total return of +5.9% and a share price
total return of -1.4% compared to the Reference Index total return of +33.5%.
The Board regularly reviews the investment policy and considers whether it
remains appropriate and, as discussed in the Chairman’s Statement, the Board
believes that the Fidelity team will recover this underperformance.
The Board has concluded that there is a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the next five years based on the following considerations:
· The Investment Manager’s compliance with the Company’s investment
objective and policy, its investment strategy and asset allocation;
· The portfolio mainly comprises readily realisable securities which can be
sold to meet funding requirements if necessary; and
· The ongoing processes for monitoring operating costs and income which are
considered to be reasonable in comparison to the Company’s total assets.
In preparing the Financial Statements, the Directors have considered the
impact of climate change as detailed above. The Board has also considered the
impact of regulatory changes and unforeseen market events and how this may
affect the Company.
In addition, the Directors’ assessment of the Company’s ability to operate
in the foreseeable future is included in the Going Concern Statement below,
and includes detail of the material uncertainty on the outcome of the
continuation vote at the AGM on 21 May 2025.
This statement has been prepared assuming the continuation votes in May 2025
and May 2025 AGMs will be passed and that the unconditional tender offer, post
31 December 2027, is not taken up by a majority of shareholders. Details of
the unconditional tender offer are outlined in the Chairman’s Statement
above.
Going Concern Statement
The Directors have considered the Company’s investment objective, risk
management policies, liquidity risk, credit risk, capital management policies
and procedures, the nature of its portfolio and its expenditure and cash flow
projections. The Directors, having considered the liquidity of the Company’s
portfolio of investments (being mainly securities which are readily
realisable) and the projected income and expenditure, are satisfied that the
Company is financially sound and has adequate resources to meet all of its
liabilities and ongoing expenses and continue in operational existence for the
foreseeable future. The Board has, therefore, concluded that the Company has
adequate resources to continue to adopt the going concern basis for the period
to 31 March 2026 which is at least twelve months from the date of approval of
the Financial Statements. This conclusion also takes into account the
Board’s assessment of the ongoing risks of earthquakes in Japan, the war in
Ukraine, the Middle East conflict and significant market and geopolitical
events and possible impact from regulatory change.
The Company, in accordance with the provisions of its Articles of Association,
is subject to a continuation vote by shareholders at the Annual General
Meeting on 21 May 2025. The Directors, having considered the performance of
the Company over the last three years, the level of discount and the recently
announced changes in portfolio management responsibilities, believe it is
difficult to determine whether shareholders will vote in favour of
continuation. There is therefore a material uncertainty over the outcome of
the continuation vote. Despite this, the Directors believe that the
preparation of the Financial Statements on a going concern basis remains
appropriate.
The prospects of the Company over a period longer than twelve months can be
found in the Viability Statement above.
PROMOTING THE SUCCESS OF THE COMPANY
Under Section 172(1) of the Companies Act 2006, the Directors of a company
must act in a way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its members as a whole,
and in doing so have regard (amongst other matters) to the likely consequences
of any decision in the long-term; the need to foster relationships with the
Company’s suppliers, customers and others; the impact of the Company’s
operations on the community and the environment; the desirability of the
Company maintaining a reputation for high standards of business conduct; and
the need to act fairly as between members of the Company.
As an externally managed investment company, the Company has no employees or
physical assets, and a number of the Company’s functions are outsourced to
third parties. The key outsourced function is the provision of investment
management services by the Manager, but other professional service providers
support the Company by providing administration, custodial, banking and audit
services. The Board considers the Company’s key stakeholders to be the
existing and potential shareholders, the externally appointed Manager (FIL
Investment Services (UK) Limited) and other third-party professional service
providers. The Board considers that the interest of these stakeholders is
aligned with the Company’s objective of delivering long-term capital growth
to investors, in line with the Company’s stated objective and strategy,
while providing the highest standards of legal, regulatory and commercial
conduct.
The Board, with the Portfolio Manager, sets the overall investment strategy
and reviews this on a regular basis. In order to ensure good governance of the
Company, the Board has set various limits on the investments in the portfolio,
whether in the maximum size of individual holdings, the use of derivatives,
the level of gearing and others. These limits and guidelines are regularly
monitored and reviewed and are set out in the Annual Report.
The Board receives regular reports from the Company’s Broker which covers
market activity, how the Company compares with its peers in the Japan sector
on performance, discount and share repurchase activity, an analysis of the
Company’s share register and market trends.
The Board places great importance on communication with shareholders. The
Annual General Meeting provides the key forum for the Board and the Portfolio
Manager to present to the shareholders on the Company’s performance and
future plans and the Board encourages all shareholders to attend in person or
virtually and raise any questions or concerns. The Chairman and other Board
members are available to meet shareholders as appropriate. Shareholders may
also communicate with Board members at any time by writing to them at the
Company’s registered office at FIL Investments International, Beech Gate,
Millfield Lane, Tadworth, Surrey KT20 6RP or via the Company Secretary at the
same address or by email at investmenttrusts@fil.com.
The Portfolio Manager meets with major shareholders, potential investors,
stock market analysts, journalists and other commentators throughout the year.
These communication opportunities help inform the Board in considering how
best to promote the success of the company over the long-term.
The Board seeks to engage with the Manager and other service providers and
advisers in a constructive and collaborative way, promoting a culture of
strong governance, while encouraging open and constructive debate, in order to
ensure appropriate and regular challenge and evaluation. This aims to enhance
service levels and strengthen relationships with service providers, with a
view to ensuring shareholders’ interests are best served, by maintaining the
highest standards of commercial conduct while keeping cost levels competitive.
Whilst the Company’s direct operations are limited, the Board recognises the
importance of considering the impact of the Company’s investment strategy on
the wider community and environment. The Board believes that a proper
consideration of ESG issues aligns with the Company’s objective to deliver
long-term capital growth, and the Board’s review of the Manager includes an
assessment of its ESG approach.
In addition to ensuring that the Company’s investment objective was being
pursued, key decisions and actions taken by the Board during the reporting
year, and up to the date of this report, have included:
· Authorising the repurchase of 10,828,535 ordinary shares into Treasury
when market conditions permitted in order to reduce discount volatility. Since
the year ended 31 December 2024 and up to the latest practicable date of this
report, a further 1,532,679 ordinary shares were repurchased into Treasury and
for cancellation;
· Meeting with the Company’s key shareholders during the reporting year;
· The decision to hold a hybrid AGM in 2024 (and again this year) in order
to make it more accessible to those shareholders who are unable to or prefer
not to attend in person;
· Meeting with the Portfolio Manager and the investment team during the
Board’s Due Diligence trip to Tokyo in June 2024; and
· The Board discussed the uncertainty in relation to the continuation vote
and the proposal of a tender offer with Stifel Nicolaus Europe Limited, the
Company’s Broker, and the Manager, including market precedents and
approaches in relation to continuation votes.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial period. Under that law, the Directors have elected to prepare the
Financial Statements in accordance with UK Generally Accepted Accounting
Practice (UK Accounting Standards and applicable law), including Financial
Reporting Standard FRS 102: The Financial Reporting Standard applicable in the
UK and Republic of Ireland (FRS 102). Under company law, the Directors must
not approve the Financial Statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Company and of the profit
or loss for the reporting period.
In preparing these Financial Statements, the Directors are required to:
· Select suitable accounting policies in accordance with Section 10 of FRS
102 and then apply them consistently;
· Make judgements and accounting estimates that are reasonable and prudent;
· Present information, including accounting policies, in a fair and balanced
manner that provides relevant, reliable, comparable and understandable
information;
· State whether applicable UK Accounting Standards, including FRS 102, have
been followed, subject to any material departures disclosed and explained in
the Financial Statements; and
· Prepare the Financial Statements on the going concern basis, unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time, the financial position of the Company and to
enable them to ensure that the Company and Financial Statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, a Directors’ Report, a Corporate Governance
Statement and a Directors’ Remuneration Report which comply with that law
and those regulations.
The Directors have delegated the responsibility for the maintenance and
integrity of the corporate and financial information included on the
Company’s pages of the Manager’s website at www.fidelity.co.uk/japan to
the Manager. Visitors to the website need to be aware that legislation in the
UK governing the preparation and dissemination of the Financial Statements may
differ from legislation in their own jurisdictions.
The Directors confirm that to the best of their knowledge:
· The Financial Statements, prepared in accordance with UK Generally
Accepted Practice, including FRS 102, give a true and fair view of the assets,
liabilities, financial position and loss of the Company;
· The Annual Report, including the Strategic Report, includes a fair review
of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties
it faces; and
· The Annual Report and Financial Statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company’s performance, business model and
strategy.
The Statement of Directors’ Responsibility was approved by the Board on 26
March 2025 and signed on its behalf by:
David Graham
Chairman
FINANCIAL STATEMENTS
Income Statement for the year ended 31 December 2024
Year ended 31 December 2024 Year ended 31 December 2023
Notes Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments 9 – (11,906) (11,906) – 12,376 12,376
Gains on derivative instruments 10 – 3,028 3,028 – 14,299 14,299
Income 3 4,095 – 4,095 4,218 – 4,218
Investment management fees 4 (330) (847) (1,177) (344) (1,018) (1,362)
Other expenses 5 (764) (13) (777) (708) (4) (712)
Foreign exchange losses – (233) (233) – (642) (642)
--------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities before finance costs and taxation 3,001 (9,971) (6,970) 3,166 25,011 28,177
Finance costs 6 (39) (158) (197) (27) (106) (133)
--------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities before taxation 2,962 (10,129) (7,167) 3,139 24,905 28,044
Taxation on return on ordinary activities 7 (356) – (356) (347) – (347)
--------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities after taxation for the year 2,606 (10,129) (7,523) 2,792 24,905 27,697
========= ========= ========= ========= ========= =========
Return/(loss) per ordinary share 8 2.17p (8.43p) (6.26p) 2.17p 19.33p 21.50p
========= ========= ========= ========= ========= =========
The Company does not have any other comprehensive income. Accordingly, the net
return/(loss) on ordinary activities after taxation for the year is also the
total comprehensive income for the year and no separate Statement of
Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the
Company. The revenue and capital columns are supplementary and presented for
information purposes as recommended by the Statement of Recommended Practice
issued by the AIC.
No operations were acquired or discontinued in the year and all items in the
above statement derive from continuing operations.
The Notes below form an integral part of these Financial Statements.
Statement of Changes in Equity for the year ended 31 December 2024
Note Share Share Capital Other Capital Revenue Total
capita premium redemption reserve reserve reserve shareholders’
£’000 account reserve £’000 £’000 £’000 funds
£’000 £’000 £’000
Total shareholders’ funds at 31 December 2023 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
Repurchase of ordinary shares 13 – – – (18,857) – – (18,857)
Net (loss)/return on ordinary activities after taxation for the year – – – – (10,129) 2,606 (7,523)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders’ funds at 31 December 2024 34,041 20,722 2,767 21,525 155,287 (2,929) 231,413
========= ========= ========= ========= ========= ========= =========
Total shareholders’ funds at 31 December 2022 34,041 20,722 2,767 46,658 140,511 (8,327) 236,372
Repurchase of ordinary shares 13 – – – (6,276) – – (6,276
Net return on ordinary activities after taxation for the year – – – – 24,905 2,792 27,697
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders’ funds at 31 December 2023 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
========= ========= ========= ========= ========= ========= =========
The Notes below form an integral part of these Financial Statements.
Balance Sheet as at 31 December 2024
Company number 2885584
Notes 2024 2023
£’000 £’000
Fixed assets
Investments 9 228,344 253,843
Current assets
Derivative instruments 10 1,457 1,216
Debtors 11 669 708
Cash collateral held with brokers 16 223 –
Cash at bank 1,897 3,073
--------------- ---------------
4,246 4,997
========= =========
Current liabilities
Derivative instruments 10 (142) (53)
Other creditors 12 (1,035) (994)
--------------- ---------------
(1,177) (1,047)
--------------- ---------------
Net current assets 3,069 3,950
========= =========
Net assets 231,413 257,793
========= =========
Capital and reserves
Share capital 13 34,041 34,041
Share premium account 14 20,722 20,722
Capital redemption reserve 14 2,767 2,767
Other reserve 14 21,525 40,382
Capital reserve 14 155,287 165,416
Revenue reserve 14 (2,929) (5,535)
--------------- ---------------
Total shareholders’ funds 231,413 257,793
========= =========
Net asset value per ordinary share 15 200.78p 204.46p
========= =========
The Financial Statements above and below were approved by the Board of
Directors on 26 March 2025 and were signed on its behalf by:
DAVID GRAHAM
Chairman
The Notes below form an integral part of these Financial Statements.
Notes to the Financial Statements
1 Principal Activity
Fidelity Japan Trust PLC is an Investment Company incorporated in England and
Wales that is listed on the London Stock Exchange The Company’s registration
number is 2885584, and its registered office is Beech Gate, Millfield Lane,
Lower Kingswood, Tadworth, Surrey KT20 6RP. The Company has been approved by
HM Revenue & Customs as an Investment Trust under Section 1158 of the
Corporation Tax Act 2010 and intends to conduct its affairs so as to continue
to be approved.
2 Accounting Policies
The Company has prepared its Financial Statements in accordance with UK
Generally Accepted Accounting Practice (UK GAAP), including FRS 102 “The
Financial Reporting Standard applicable in the UK and Republic of Ireland”,
issued by the Financial Reporting Council (FRC). The Financial Statements have
also been prepared in accordance with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts
(SORP) issued by the Association of Investment Companies (AIC) in July 2022.
The Company is exempt from presenting a Cash Flow Statement as a Statement of
Changes in Equity presented and substantially all of the Company’s
investments are highly liquid and are carried at market value.
a) Basis of accounting
The Financial Statements have been prepared on a going concern basis and under
the historical cost convention, except for the measurement at fair value of
investments and derivative instruments.
The Directors have a reasonable expectation that the Company has adequate
resources to continue its operations and meet its liabilities as they fall due
up to 31 March 2026 which is at least twelve months from the date of approval
of these Financial Statements. In making their assessment the Directors have
reviewed income and expense projections, the liquidity of the investment
portfolio of the Company and considered the Company’s ability to meet
liabilities as they fall due.
In accordance with the provisions of the Company’s Articles of Association,
the Company is subject to a continuation vote by shareholders at the AGM on 21
May 2025.
As at the date of this report, due to the performance of the Company over the
last three years, the level of discount and the recently announced changes in
portfolio management responsibilities, it is not possible to determine with
certainty that shareholders will vote in favour of continuation of the
Company. In this regard, there is a material uncertainty over the outcome of
the continuation vote, and whilst this may cast doubt on the likelihood of the
Company continuing as a going concern, the Directors believe that the
preparation of the Financial Statements on a going concern basis remains
appropriate.
In preparing these Financial Statements, the Directors have considered the
impact of climate change risk as an emerging and principal risk as set out
above, and have concluded that there was no further impact of climate change
to be taken into account as the investments are valued based on market
pricing. In line with FRS 102, investments are valued at fair value, which for
the Company are quoted bid prices for investments in active markets at the
balance sheet date. Investments which are unlisted are priced using
market-based valuation approaches. All investments therefore reflect the
market participants view of climate change risk on t investments held by the
Company.
The Company’s Going Concern Statement above takes account of all events and
conditions up to 31 March 2026 which is at least twelve months from the date
of approval of these Financial Statements.
b) Significant accounting estimates, assumptions and judgements
The preparation of the Financial Statements requires the use of estimates,
assumptions and judgements. These estimates, assumptions and judgements affect
the reported amounts of assets and liabilities at the reporting date. While
estimates are based on best judgement using information and financial data
available, the actual outcome may differ from these estimates.
The key sources of estimation and uncertainty relate to the fair value of the
unlisted investments.
Judgements
The Directors consider whether each fair value is appropriate following
detailed review and challenge of the pricing methodology. The judgement
applied in the selection of the methodology used (see Note 2 (j) below) for
determining the fair value of each unlisted investment can have a significant
impact upon the valuation.
Estimates
The key estimate in the Financial Statements is the determination of the fair
value of the unlisted investments by the Manager’s Fair Value Committee
(FVC), with support from the external valuer, for detailed review and
appropriate challenge by the Directors. This estimate is key as it
significantly impacts the valuation of the unlisted investments at the Balance
Sheet date. When no recent prima or secondary transaction in the company’s
shares have taken place, the fair valuation process involves estimation using
subjective inputs that are unobservable (for which market data is
unavailable). The estimates involved in the valuation process may include the
following:
(i) The selection of appropriate comparable companies. Comparable companies
are chosen on the basis of their business characteristics and growth patterns;
(ii) The selection of a revenue metric (either historical or forecast);
(iii) The selection of an appropriate illiquidity discount factor to reflect
the reduced liquidity of unlisted companies versus their listed peers;
(iv) The estimation of the likelihood of a future exit of the position
through an initial public offering (IPO) or a company sale;
(v) The selection of an appropriate industry benchmark index to assist with
the valuation; and
(vi) The calculation of valuation adjustments derived from milestone analysis
(i.e. incorporating operational success against the plans/forecasts of the
business into the valuation).
As the valuation outcomes may differ from the fair value estimates a price
sensitivity analysis is provided in Other Price Risk Sensitivity in Note 16 to
illustrate the effect on the Financial Statements of an over or under
estimation of fair value.
The risk of an over or under estimation of fair value is greater when
methodologies are applied using more subjective inputs.
Assumptions
The determination of fair value by the FVC involves key assumptions dependent
upon the valuation techniques used. The valuation process recognises that the
price of a recent investment may be an appropriate starting point for
estimating fair value. The Multiples approach involves subjective inputs and
therefore presents a greater risk of over or under estimation, particularly in
the absence of a recent transaction.
c) Segmental reporting
The Company is engaged in a single segment business and, therefore, no
segmental reporting is provided.
d) Presentation of the Income Statement
In order to reflect better the activities of an investment company and in
accordance with guidance issued by the AIC, supplementary information which
analyses the Income Statement between items of a revenue and capital nature
has been prepared alongside the Income Statement. The net return/(loss) after
taxation for the year is the measure the Directors believe appropriate in
assessing the Company’s compliance with certain requirements set out in
Section 1159 of the Corporation Tax Act 2010.
e) Income
Income from equity investments is accounted for on the date on which the right
to receive the payment is established, normally the ex-dividend date. Overseas
dividends are accounted for gross of any tax deducted at source. Amounts are
credited to the revenue column of the Income Statement. Where the Company has
elected to receive its dividends in the form of additional shares rather than
cash, the amount of the cash dividend foregone is recognised in the revenue
column of the Income Statement. Any excess in the value of the shares received
over the amount of the cash dividend is recognised in the capital column of
the Income Statement. Special dividends are treated as a revenue receipt or a
capital receipt depending on the facts and circumstances of each particular
case.
Derivative instrument income received from dividends on long Contracts for
Difference (CFDs) is accounted for on the date on which the right to receive
the payment is established, normally the ex-dividend date. The amount net of
tax is credited to the revenue column of the Income Statement.
f) Investment management fees and other expenses
Investment management fees and other expenses are accounted for on an accruals
basis and are charged as follows:
· The base investment management fee is allocated 20% to revenue and 80% to
capital to reflect the Company’s focus on capital growth to generate
returns;
· The variable investment management fee is charged/credited to capital, as
it is based on the performance of the net asset value per share relative to
the Reference Index; and
· All other expenses are allocated in full to revenue with the exception of
those directly attributable to share issues or other capital events.
g) Functional currency and foreign exchange
The functional and reporting currency of the Company is UK sterling, which is
the currency of the primary economic environment in which the Company
operates. Although the Company invests in yen denominated investments, it has
been determined that the functional currency is UK sterling as the entity is
listed on a sterling stock exchange in the UK, and its share capital is
denominated and its expenses are paid in UK sterling. Transactions denominated
in foreign currencies are reported in UK sterling at the rate of exchange
ruling at the date of the transaction. Assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the Balance Sheet
date. Foreign exchange gains and losses arising on translation are recognised
in the Income Statement as a revenue or a capital item depending on the nature
of the underlying item to which they relate.
h) Finance costs
Finance costs comprises interest on bank overdrafts and collateral and finance
costs paid on long CFDs, which are accounted for o an accruals basis. Finance
costs are allocated 20% to revenue and 80% to capital to reflect the
Company’s focus on capital growth generate returns.
i) Taxation
The taxation charge represents the sum of current taxation and deferred
taxation.
Current taxation is taxation suffered at source on overseas income less
amounts recoverable under taxation treaties. Taxation is charged or credited
to the revenue column of the Income Statement, except where it relates to
items of a capital nature, in which c it is charged or credited to the capital
column of the Income Statement. The Company is an approved Investment Trust
under Section 1158 of the Corporation Tax Act 2010 and is not liable for UK
taxation on capital gains.
Deferred taxation is the taxation expected to be payable or recoverable on
timing differences between the treatment of certain items for accounting
purposes and their treatment for the purposes of computing taxable profits.
Deferred taxation is based on tax rates have been enacted or substantively
enacted when the taxation is expected to be payable or recoverable. Deferred
tax assets are only recognised if it is considered more likely than not that
there will be sufficient future taxable profits to utilise them.
j) Investments
The Company’s business is investing in financial instruments with a view to
profiting from their total return in the form of income and cap growth. This
portfolio of investments is managed and its performance evaluated on a fair
value basis, in accordance with a documented investment strategy, and
information about the portfolio is provided on that basis to the Company’s
Board of Directors. Investments are measured at fair value with changes in
fair value recognised in profit or loss, in accordance with the provisions of
both Section 11 and Section 12 of FRS 102. The fair value of investments is
initially taken to be their cost and is subsequently measured as follows:
· Listed investments are valued at bid prices, or last market prices,
depending on the convention of the exchange on which they are listed: and
· Investments which are not quoted, or are not frequently traded, are stated
at the best estimate of fair value. The Manager’s Fa Value Committee (FVC),
which is independent of the Portfolio Manager’s team, and with support from
the external valuer and Fidelity’s unlisted investments specialist, provides
recommended fair values to the Directors. These are based on the principles
outlined in Note 2 (b). The unlisted investments are valued at fair value
following a detailed review and appropriate challenge by the Directors of the
pricing methodology used by the FVC.
The techniques applied by the FVC when valuing the unlisted investments are
predominantly market-based approaches. The market-based approaches are set out
below and are followed by an explanation of how they are applied to the
Company’s unlisted portfolio:
· Multiples;
· Industry Valuation Benchmarks; and
· Available Market Prices.
The nature of the unlisted investment will influence the valuation technique
applied. The valuation approach recognises that the price of a recent
investment, if resulting from an orderly transaction, generally represents
fair value as at the transaction date and may b an appropriate starting point
for estimating fair value at subsequent measurement dates. However,
consideration is given to the fa and circumstances as at the subsequent
measurement date, including changes in the market or performance of the
investee comp Milestone analysis is used where appropriate to incorporate the
operational progress of the investee company into the valuation. Consideration
is also given to the input received from the Fidelity analyst that covers the
company, Fidelity’s unlisted investments specialist and an external valuer.
Additionally, the background to the transaction must be considered. As a
result, various multiples-based techniques are employed to assess the
valuations particularly in those companies with established revenues. An
absence of relevant industry peers may preclude the application of the
Industry Valuation Benchmarks technique and an absence of observable prices
may preclude the Available Market Prices approach.
The unlisted investments are valued according to a three month cycle of
measurement dates. The fair value of the unlisted investment will be reviewed
before the next scheduled three monthly measurement date on the following
occasions:
· At the year end and half year end of the Company; and
· Where there is an indication of a change in fair value (commonly referred
to as ‘trigger’ events).
In accordance with the AIC SORP, the Company includes transaction costs,
incidental to the purchase or sale of investments, within gains/(losses) on
investments in the capital column of the Income Statement and has disclosed
these costs in Note 9.
k) Derivative instruments
When appropriate, permitted transactions in derivative instruments are used.
Some of the Company’s portfolio exposure to Japanese equities is achieved by
investment in long CFDs. Long CFDs are classified as other financial
instruments and are initially accounted and measured at fair value on the date
the derivative contract is entered into and subsequently measured at fair
value as follows:
· Long CFDs are the difference between the strike price and the value of the
underlying shares in the contract.
l) Debtors
Debtors include securities sold for future settlement, accrued income, other
debtors and prepayments incurred in the ordinary course of business. If
collection is expected in one year or less (or in the normal operating cycle
of the business, if longer) they are classified as current assets. If not,
they are presented as non-current assets. They are recognised initially at
fair value and, where applicable, subsequently measured at amortised cost
using the effective interest rate method.
m) Cash collateral held with brokers
These are amounts held in segregated accounts on behalf of brokers as
collateral against open derivative contracts. These are carried at amortised
cost.
n) Other creditors
Other creditors include securities purchased for future settlement, investment
management fees, other creditors and expenses accrued in the ordinary course
of business. If payment is due within one year or less (or in the normal
operating cycle of the business, if longer) they are classified as current
liabilities. If not, they are presented as non-current liabilities. They are
recognised initially at fair value and, where applicable, subsequently
measured at amortised cost using the effective interest rate method.
o) Other reserve
The full cost of ordinary shares repurchased and held in Treasury is charged
to the other reserve.
p) Capital reserve
The following are accounted for in the capital reserve:
· Gains and losses on the disposal of investments and derivative
instruments;
· Changes in the fair value of investments and derivative instruments held
at the year end;
· Foreign exchange gains and losses of a capital nature;
· Dividends receivable which are capital in nature;
· 80% of base investment management fees and finance costs;
· Variable investment management fees; and
· Other expenses which are capital in nature.
Technical guidance issued by the Institute of Chartered Accountants in England
and Wales in TECH 02/17BL, guidance on the determination of realised profits
and losses in the context of distributions under the Companies Act 2006,
states that changes in the fair value of investments which are readily
convertible to cash, without accepting adverse terms at the Balance Sheet
date, can be treated as realised. Capital reserves realised and unrealised are
shown in aggregate as capital reserve in the Statement of Changes in Equity
and the Balance Sheet. At the Balance Sheet date, the portfolio of the Company
consisted of investments listed on a recognised stock exchange and derivative
instruments contracted with counterparties having an adequate credit rating,
and the portfolio was considered to be readily convertible to cash, with the
exception of the level 3 investments which had unrealised investment holding
losses of £6,715,000 (2023: losses of £5,630,000). See Note 16 below for
further details on the level 3 investments.
3 INCOME
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
Investment income
Overseas dividends 3,563 2,625
Derivative income
Dividends received on long CFDs 530 743
Other interest
Interest received on bank deposits 2 –
--------------- ---------------
Total income 4,095 4,218
========= =========
No special dividends have been recognised in capital during the reporting year
(2023: £nil).
4 INVESTMENT MANAGEMENT FEES
Year ended 31 December 2024 Year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fees – base 330 1,318 1,648 344 1,377 1,721
Investment management fees – variable 1 – (471) (471) – (359) (359)
--------------- --------------- --------------- --------------- --------------- ---------------
330 847 1,177 344 1,018 1,362
========= ========= ========= ========= ========= =========
1 For the calculation of the variable management fee element, the Company’s
NAV return was compared to the Reference Index return on a daily basis. The
period u to assess the performance is on a rolling three year basis.
FIL Investment Services (UK) Limited is the Company’s Alternative Investment
Fund Manager and has delegated portfolio management to FIL Investments
International (FII). Both companies are Fidelity group companies.
FII charges base investment management fees at an annual rate of 0.70% of net
assets. In addition, there is a +/- 0.20% variation fee based on performance
relative to the Reference Index over a three year rolling period. Fees are
payable monthly in arrears and a calculated on a daily basis.
The base investment management fee has been allocated 80% to capital reserve
in accordance with the Company’s accounting policies.
Further details of the terms of the Management Agreement are given in the
Directors’ Report in the Annual Report.
5 OTHER EXPENSES
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
Allocated to revenue:
AIC fees 19 18
Secretarial and administration fees payable to the Investment Manager 50 50
Custody fees 13 13
Depositary fees 22 24
Directors’ expenses 75 43
Directors’ fees 1 177 160
Legal and professional fees 67 70
Marketing expenses 175 166
Printing and publication expenses 67 61
Registrars’ fees 35 33
Other expenses 13 17
Fees payable to the Company’s Independent Auditor for the audit of the Financial Statements 55 53
--------------- ---------------
764 708
--------------- ---------------
Allocated to capital:
Legal and professional fees – unlisted investments 13 4
--------------- ---------------
Other expenses 777 712
========= =========
1 Details of the breakdown of Directors’ fees are provided in the
Directors’ Remuneration Report in the Annual Report.
6 FINANCE COSTS
Year ended 31 December 2024 Year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Interest paid on long CFDs 37 150 187 24 94 118
Interest paid on collateral and deposits 1 2 8 10 3 12 15
--------------- --------------- --------------- --------------- --------------- ---------------
39 158 197 27 106 133
========= ========= ========= ========= ========= =========
1 Due to negative interest rates during the current and prior year, the
Company paid interest on its collateral and deposits.
Finance costs have been allocated 80% to capital reserve in accordance with
the Company’s accounting policies.
7 TAXATION ON RETURN/(LOSS) ON ORDINARY ACTIVITIES
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
a) Analysis of the taxation charge for the year
Overseas taxation 356 347
--------------- ---------------
Taxation charge for the year (see Note 7b) 356 347
========= =========
b) Factors affecting the taxation charge for the year
The taxation charge for the year is lower than the standard rate of UK
corporation tax for an investment trust company of 25% (202 25%). A
reconciliation of the standard rate of UK corporation tax to the taxation
charge for the year is shown below:
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
Net (loss)/return on ordinary activities before taxation (7,167) 28,044
--------------- ---------------
Net (loss)/return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 25% (2023: blended rate of 23.52%) (1,762) 6,596
Effects of:
Capital losses/(gains) not taxable 1 2,278 (6,123)
Income not taxable (891) (817)
Expenses not deductible 38 23
Excess management expenses not utilised 367 321
Overseas taxation 356 347
--------------- ---------------
Taxation charge for the year (see Note 7a) 356 347
========= =========
1 The Company is exempt from UK taxation on capital gains as it meets the HM
Revenue & Customs criteria for an investment company set out in Section 1159
of the Corporation Tax Act 2010.
c) Deferred taxation
A deferred taxation asset of £9,253,000 (2023: £8,886,000), in respect of
excess expenses of £37,011,000 (2023: £35,543,000) has n been recognised as
it is unlikely that there will be sufficient future profits to utilise these
expenses.
The UK corporation tax rate increased from 19% to 25% from 1 April 2023. The
rate of 25% has been applied to calculate the unrecognised deferred tax asset
for the current year (2023: 25%).
8 RETURN/(LOSS) PER ORDINARY SHARE
Year ended Year ended
31.12.24 31.12.23
Revenue return per ordinary share 2.17p 2.17p
Capital (loss)/return per ordinary share (8.43p) 19.33p
--------------- ---------------
Total (loss)/return per ordinary share (6.26p) 21.50p
========= =========
The return/(loss) per ordinary share is based on the net return/(loss) on
ordinary activities after taxation for the year divided by the weighted
average number of ordinary shares held outside Treasury during the year, as
shown below:
£’000 £’000
Net revenue return on ordinary activities after taxation 2,606 2,792
Net capital (loss)/return on ordinary activities after taxation (10,129) 24,905
--------------- ---------------
Net total (loss)/return on ordinary activities after taxation (7,523) 27,697
========= =========
Number Number
Weighted average number of ordinary shares held outside of Treasury 120,169,404 128,843,583
========== ==========
9 INVESTMENTS
2024 2023
£’000 £’000
Listed investments 213,026 237,440
Unlisted investments 15,318 16,403
--------------- ---------------
Investments at fair value 228,344 253,843
========= =========
Opening book cost 244,383 242,067
Opening investment holding gains/(losses) 9,460 (11,387)
--------------- ---------------
Opening fair value 253,843 230,680
========= =========
Movements in the year
Purchases at cost 186,791 158,947
Sales – proceeds (200,384) (148,160)
(Losses)/gains on investments (11,906) 12,376
--------------- ---------------
Closing fair value 228,344 253,843
========= =========
Closing book cost 222,161 244,383
Closing investment holding gains 6,183 9,460
--------------- ---------------
Closing fair value 228,344 253,843
========= =========
The Company received £200,384,000 (2023: £148,160,000) from investments sold
in the year. The book cost of these investments when they were purchased was
£209,013,000 (2023: £156,631,000). These investments have been revalued over
time and until they were sold any unrealised gain/(losses) were included in
the fair value of the investments.
Investment transaction costs
Transaction cost incurred in the acquisition and disposal of investments,
which are included in the (losses)/gains on investments above were as follows:
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
Purchases transaction costs 69 57
Sales transaction costs 94 63
--------------- ---------------
163 120
========= =========
10 DERIVATIVE INSTRUMENTS
Year ended Year ended
31.12.24 31.12.23
£’000 £’000
Gains on derivative instruments
Gains on long CFD positions closed 2,876 12,874
Movement in investment holding gains on long CFDs 152 1,425
--------------- ---------------
3,028 14,299
========= =========
Derivative instruments recognised on the Balance Sheet
2024 2023
Fair value Portfolio Fair value Portfolio
£’000 exposure £’000 exposure
£’000 £’000
Derivative instrument assets – long CFDs 1,457 50,375 1,216 41,568
Derivative instrument liabilities – long CFDs (142) 8,254 (53) 21,953
--------------- --------------- --------------- ---------------
1,315 58,629 1,163 63,521
========= ========= ========= =========
11 DEBTORS
2024 2023
£’000 £’000
Securities sold for future settlement 372 361
Accrued income 199 249
Other debtors and prepayments 98 98
--------------- ---------------
669 708
========= =========
12 OTHER CREDITORS
2024 2023
£’000 £’000
Securities purchased for future settlement 383 438
Creditors and accruals 329 285
Amounts payable for repurchase of shares 323 271
--------------- ---------------
1,035 994
========= =========
13 SHARE CAPITAL
2024 2023
Number of Nominal Number of Nominal
shares value shares value
£’000 £’000
Issued, allotted and fully paid
Ordinary shares of 25 pence each held outside of Treasury
Beginning of the year 126,086,249 31,521 129,701,893 32,425
Ordinary shares repurchased into Treasury (10,828,535) (2,707) (3,615,644) (904)
----------------- ----------------- ----------------- -----------------
End of the year 115,257,714 28,814 126,086,249 31,521
========== ========== ========== ==========
Issued, allotted and fully paid
Ordinary shares of 25 pence each held in Treasury 1
Beginning of the year 10,075,446 2,520 6,459,802 1,616
Ordinary shares repurchased into Treasury 10,828,535 2,707 3,615,644 904
----------------- ----------------- ----------------- -----------------
End of the year 20,903,981 5,227 10,075,446 2,520
========== ========== ========== ==========
Total share capital 34,041 34,041
========== ==========
1 Ordinary shares held in Treasury carry no rights to vote, to receive a
dividend or to participate in a winding up of the Company.
The Company repurchased 10,828,535 ordinary shares (2023: 3,615,644 shares)
and held them in Treasury. The £18,857,000 (2023: £6,276,000) cost of
repurchase was charged to the Other reserve.
14 CAPITAL AND RESERVES
Share Share Capital Other Capital Revenue Total
capital premium redemption reserve reserve reserve shareholders’
£’000 account reserve £’000 £’000 £’000 funds
£’000 £’000 £’000
At 1 January 2024 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
Losses on investments (see Note 9) – – – – (11,906) – (11,906)
Gains on derivative instruments (see Note 10) – – – – 3,028 – 3,028
Foreign exchange losses – – – – (233) – (233)
Investment management fees (see Note 4) – – – – (847) – (847)
Other expenses (see Note 5) – – – – (13) – (13)
Finance costs (see Note 6) – – – – (158) – (158)
Revenue return on ordinary activities after taxation for the year – – – – – 2,606 2,606
Repurchase of ordinary shares (see Note 13) – – – (18,857) – – (18,857)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2024 34,041 20,722 2,767 21,525 155,287 (2,929) 231,413
========= ========= ========= ========= ========= ========= =========
Share Share Capital Other Capital Revenue Total
capital premium redemption reserve reserve reserve shareholders’
£’000 account reserve £’000 £’000 £’000 funds
£’000 £’000 £’000
At 1 January 2023 34,041 20,722 2,767 46,658 140,511 (8,327) 236,372
Gains on investments (see Note 9) – – – – 12,376 – 12,376
Gains on derivative instruments (see Note 10) – – – – 14,299 – 14,299
Foreign exchange losses – – – – (642) – (642)
Investment management fees (see Note 4) – – – – (1,018) – (1,018)
Other expenses (see Note 5) – – – – (4) – (4)
Finance costs (see Note 6) – – – – (106) – (106)
Revenue return on ordinary activities after taxation for the year – – – – – 2,792 2,792
Repurchase of ordinary shares (see Note 13) – – – (6,276) – – (6,276)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December 2023 34,041 20,722 2,767 40,382 165,416 (5,535) 257,793
========= ========= ========= ========= ========= ========= =========
The capital reserve balance at 31 December 2024 includes investment holding
gains of £6,183,000 (2023: gains of £9,460,000) as detailed in Note 9. See
Note 2 (p) above for further details. The capital reserve is distributable by
way of dividend. The revenue reserve could be distributed by way of dividend
if it were not in deficit.
15 NET ASSET VALUE PER ORDINARY SHARE
The calculation of the net asset value per ordinary share is based on the
total shareholders’ funds divided by the number of ordinary shares held
outside of Treasury.
2024 2023
Total shareholders’ funds £231,413,000 £257,793,000
Ordinary shares held outside of Treasury at year end 115,257,714 126,086,249
Net asset value per ordinary share 200.78p 204.46p
=========== ============
It is the Company’s policy that shares held in Treasury will only be
reissued at net asset value per ordinary share or at a premium to net asset
value per ordinary share and, therefore, shares held in Treasury have no
dilutive effect.
16 FINANCIAL INSTRUMENTS
Management of Risk
The Company’s investment activities in pursuit of its objective involve
certain inherent risks. The Board confirms that there is an ongoing process
for identifying, evaluating and managing the risks faced by the Company. The
Board, with the assistance of the Manager, has developed a risk matrix which,
as part of the internal control process, identifies the risks that the Company
faces. Principal risks identified are: geopolitical; investment performance
and gearing; natural disaster; market, economic and currency; competition and
marketplace threats; discount control and demand; key person; legislation,
taxation and regulatory; business continuity; cybercrime and information
security; environmental, social and governance (ESG); and continuation vote.
Risks are identified and graded in this process, together with steps taken in
mitigation, and are updated and reviewed on an ongoing basis. These risks and
how they are identified, evaluated and managed are shown in the Strategic
Report above.
This note refers to the identification, measurement and management of risks
potentially affecting the value of financial instruments. The Company’s
financial instruments may comprise:
· Equity shares held in accordance with the Company’s investment objective
and policies;
· Derivative instruments which comprise CFDs; and
· Cash, liquid resources and short-term debtors and creditors that arise
from its operations.
The risks identified arising from the Company’s financial instruments are
market price risk (which comprises interest rate risk, foreign currency risk
and other price risk), liquidity risk, counterparty risk, credit risk and
derivative instrument risk. The Board reviews and agrees policies for managing
each of these risks, which are summarised below. These policies are consistent
with those followed last year.
MARKET PRICE RISK
Interest rate risk
The Company finances its operations through its share capital and reserves. In
addition, the Company has a geared exposure to Japanese equities through the
use of long CFDs. The level of gearing is reviewed by the Board and the
Portfolio Manager. The Company is exposed to a financial risk arising as a
result of any increases in yen interest rates associated with the funding of
the long CFDs.
Interest rate risk exposure
The values of the Company’s financial instruments that are exposed to
movements in interest rates are shown below:
2024 2023
£’000 £’000
Exposure to financial instruments that bear interest
Long CFDs – Portfolio exposure less fair value 57,314 62,358
--------------- ---------------
57,314 62,358
========= =========
Exposure to financial instruments that earn interest
Cash collateral held with brokers 223 –
Cash at bank 1,897 3,073
--------------- ---------------
2,120 3,073
========= =========
Net exposure to financial instruments that bear interest 55,194 59,285
========= =========
Foreign currency risk
The Company’s net return/(loss) on ordinary activities after taxation for
the year and its net assets may be affected by foreign exchange movements
because the Company has income and assets which are denominated in yen whereas
the Company’s functional currency is UK sterling. The Company may also be
subject to short-term exposure from exchange rate movements, for example,
between the date when an investment is purchased or sold and the date when
settlement of the transaction occurs. The Company does not hedge the sterling
value of investments or other net assets priced in yen by the use of
derivative instruments.
Three principal areas have been identified where foreign currency risk may
impact the Company:
· Movements in currency exchange rates affecting the value of investments
and long CFDs;
· Movements in currency exchange rates affecting short-term timing
differences; and
· Movements in currency exchange rates affecting income received.
Currency exposure of financial assets
The currency exposure profile of the Company’s financial assets is shown
below:
2024
Currency Investments Long Debtors 1 Cash at Total
held at exposure to £’000 bank £’000
fair value derivative £’000
£’000 instruments
£’000
Japanese yen 228,344 58,629 794 1,897 289,664
UK sterling – – 98 – 98
--------------- --------------- --------------- --------------- ---------------
228,344 58,629 892 1,897 289,762
========= ========= ========= ========= =========
1 Debtors include cash collateral held with brokers.
2023
Currency Investments Long Debtor Cash at Total
held at exposure to £’000 bank £’000
fair value derivative £’000
£’000 instruments
£’000
Japanese yen 253,843 63,521 610 2,950 320,924
UK sterling – – 98 123 221
--------------- --------------- --------------- --------------- ---------------
253,843 63,521 708 3,073 321,145
========= ========= ========= ========= =========
Currency exposure of financial liabilities
The currency profile of the Company’s financial liabilities is shown below:
Currency 2024 2023
Other Other
creditors creditors
£’000 £’000
Japanese yen 383 439
UK sterling 652 555
--------------- ---------------
1,035 994
========= =========
Other price risk
Other price risk arises mainly from uncertainty about future prices of
financial instruments used in the Company’s business. It represents the
potential loss the Company might suffer through holding market positions in
the face of price movements. The Board meets quarterly to consider the asset
allocation of the portfolio and the risk associated with particular industry
sectors within the parameters of the investment objective. The Portfolio
Manager is responsible for actively monitoring the existing portfolio selected
in accordance with the overall asset allocation parameters described above and
seeks to ensure that individual stocks also meet an acceptable risk/reward
profile. Other price risks arising from derivative positions, mainly due to
the underlying exposures, are estimated using Value at Risk and Stress Tests
as set out in the Company’s internal Risk Management Process Document.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulties in
meeting obligations associated with financial liabilities. The Company’s
assets mainly comprise readily realisable securities and derivative
instruments which can be sold easily to meet funding commitments if necessary.
Short-term flexibility is achieved by the use of a bank overdraft, if
required.
Liquidity risk exposure
At 31 December 2024, the undiscounted gross cash outflows of the financial
liabilities were all repayable within one year and consisted of derivative
instrument liabilities of £142,000 (2023: £53,000) and other creditors of
£1,035,000 (2023: £994,000).
Counterparty risk
Certain derivative instruments in which the Company may invest are not traded
on an exchange but instead will be traded between counterparties based on
contractual relationships, under the terms outlined in the International Swaps
and Derivatives Association’s (ISDA) market standard derivative legal
documentation. These are known as Over the Counter (OTC) trades. As a result,
the Company is subject to the risk that a counterparty may not perform its
obligations under the related contract. In accordance with the risk management
process which the Investment Manager employs, this risk is minimised by only
entering into transactions with counterparties which are believed to have an
adequate credit rating at the time the transaction is entered into, by
ensuring that formal legal agreements covering the terms of the contract are
entered into in advance, and through adopting a counterparty risk framework
which measures, monitors and manages counterparty risk by the use of internal
and external credit agency ratings and by evaluating derivative instrument
credit risk exposure.
Cash collateral
For derivative transactions, collateral is used to reduce the risk of both
parties to the contract. Collateral is managed on a daily basis for all
relevant transactions. At 31 December 2024, £1,487,000 (2023: £1,775,000)
was held by the brokers in cash denominated in Japanese yen in a segregated
collateral account on behalf of the Company, to reduce the credit risk
exposure of the Company’s net unrealised profits on derivative positions.
This collateral comprised: J.P. Morgan Securities plc £nil (2023: £574,0000)
and UBS AG £1,487,000 (2023: £1,201,000). At 31 December 2024, £223,000
(2023: £nil) shown as cash collateral held with brokers on the Balance Sheet,
was held by the Company in a segregated collateral account to reduce the
credit risk exposure of the Company’s net unrealised losses on derivative
positions. This collateral comprised of: J.P. Morgan Securities plc £223,000
(2023: £nil) in cash denominated in Japanese yen.
Credit risk
Financial instruments may be adversely affected if any of the institutions
with which money is deposited suffer insolvency or other financial
difficulties. All transactions are carried out with brokers that have been
approved by the Manager and are settled on a delivery versus payment basis.
Limits are set on the amount that may be due from any one broker and are kept
under review by the Manager. Exposure to credit risk arises on unsettled
security transactions and long CFD contracts and cash at bank.
Derivative instrument risk
The risks and risk management processes which result from the use of long CFDs
are included within the risk categories disclosed above. Long CFDs are used by
the Manager to gain unfunded long exposure to equity markets, sectors or
single stocks. Unfunded exposure is exposure gained without an initial outflow
of capital. The risk and performance contribution of long CFDs held in the
Company’s portfolio is overseen by the Manager’s experienced, specialist
derivative instruments team that uses portfolio risk assessment and
construction tools to manage risk and investment performance.
RISK SENSITIVITY ANALYSIS
Interest rate risk sensitivity analysis
Based on the financial instruments held and interest rates at 31 December
2024, an increase of 0.25% in interest rates throughout the year, with all
other variables held constant, would have increased the Company’s net loss
on ordinary activities after taxation for the year and decreased the
Company’s net assets by £138,000 (2023: decreased the net return and
decreased the net assets by £148,000). A decrease of 0.25% in interest rates
throughout the year would have had an equal but opposite effect.
Foreign currency risk sensitivity analysis
Based on the financial instruments held and currency exchange rates at 31
December 2024, a 10% strengthening of the sterling exchange rate against the
yen, with all other variables held constant, would have increased the
Company’s net loss on ordinary activities after taxation for the year and
decreased the Company’s net assets by £26,298,000 (2023: decreased the net
return and decreased the net assets by £29,134,000). A 10% weakening of the
sterling exchange rate against the yen would have decreased the Company’s
net loss on ordinary activities after taxation for the year and increased the
Company’s net assets by £32,142,000 (2023: increased the net return and
increased the net assets by £35,609,000).
Other price risk – exposure to investments sensitivity analysis
Based on the listed investments held and share prices at 31 December 2024, an
increase of 10% in share prices, with all other variables held constant, would
have decreased the Company’s net loss on ordinary activities after taxation
for the year and increased the Company’s net assets by £21,303,000 (2023:
increased the net return and increased the net assets by £23,744,000). A
decrease of 10% in share prices would have had an equal and opposite effect.
Based on the unlisted investments held and share prices at 31 December 2024,
an increase of 10% in share prices, with all other variables held constant,
would have decreased the Company’s net loss on ordinary activities after
taxation for the year and increased the Company’s net assets by £1,532,000
(2023: increased the net return and increased the net assets by £1,640,000).
A decrease of 10% in share prices would have had an equal and opposite effect.
Other price risk – net exposure to derivative instruments sensitivity
analysis
Based on the long CFDs held and share prices at 31 December 2024, an increase
of 10% in the share prices underlying the long CFDs, with all other variables
held constant, would have decreased the Company’s net loss on ordinary
activities after taxation for the year and increased the Company’s net
assets by £5,863,000 (2023: increased the net return and increased the net
assets by £6,352,000). A decrease of 10% in share prices would have had an
equal and opposite effect.
Fair Value of Financial Assets and Liabilities
Financial assets and liabilities are stated in the Balance Sheet at values
which are not materially different to their fair values. As explained in Notes
2 (j) and (k) above, investments and derivative instruments are shown at fair
value. In the case of cash at bank, book value approximates to fair value due
to the short maturity of the instruments.
Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies
its financial instruments measured at fair value at one of three levels,
according to the relative reliability of the inputs used to estimate the fair
values.
Classification Input
Level 1 Valued using quoted prices in active markets for identical assets
Level 2 Valued by reference to inputs other than quoted prices included in level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly
Level 3 Valued by reference to valuation techniques using inputs that are not based on observable market data
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset. The valuation techniques used by the Company are explained in
Notes 2 (j) and (k) above. The table below sets out the Company’s fair value
hierarchy:
2024
Financial assets at fair value through profit or loss Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
228,344
Investments 213,026 – 15,318
Derivative instrument assets – 1,457 – 1,457
--------------- --------------- --------------- ---------------
213,026 1,457 15,318 229,801
========= ========= ========= =========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – (142) – (142)
========= ========= ========= =========
2023
Financial assets at fair value through profit or loss Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Investments 237,440 – 16,403 253,843
Derivative instrument assets – 1,216 – 1,216
--------------- --------------- --------------- ---------------
237,440 1,216 16,403 255,059
========= ========= ========= =========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – (53) – (53)
========= ========= ========= =========
The table below sets out the fair value of the level 3 financial instruments,
all of which are unlisted investments:
Name Business Book cost 2024 2022
£’000 Level 3 Level 3
£’000 £’000
Asoview Online booking website for leisure facilities 6,602 6,114 5,740
GO Inc Japan’s largest ride-hailing company 2,378 2,905 2,487
Studyplus Online educational company 2,257 1,960 2,110
iYell Mortgage Fintech company 2,641 1,652 2,189
Moneytree Developer of personal asset management applications 3,016 1,042 1,832
Spiber Bio-tech company 2,512 1,014 1,011
Yoriso Online funeral planning platform 2,627 631 1,034
--------------- --------------- ---------------
End of the year 22,033 15,318 16,403
========= ========= =========
The valuation of all the unlisted investments at 31 December 2024 is based on
the analysis of the company’s financial reports, the macro-environment and
benchmarking the position to a range of comparable market data. For more
details on the technique applied to the value of unlisted investments, see
Note 2 (j) in the Accounting Policies section.
Movements in level 3 financial instruments during the year: Year ended Year ended
31.12.24 31.12.23
Level 3 Level 3
£’000 £’000
Beginning of the year 16,403 18,933
Purchases at cost – 2,378
Sales proceeds – Innophys – (274)
Sales loss – Innophys – (639)
Movement in investment holding losses (including foreign exchange movement) (1,085) (3,995)
--------------- ---------------
End of the year 15,318 16,403
========= =========
17 CAPITAL RESOURCES AND GEARING
The Company does not have any externally imposed capital requirements. The
financial resources of the Company comprise its share capital and reserves, as
disclosed in the Balance Sheet above, and its gearing which is achieved
through the use of long CFDs Financial resources are managed in accordance
with the Company’s investment policy and in pursuit of its objective, both
of which are detailed in the Strategic Report in the Annual Report. The
principal risks and their management are disclosed in the Strategic Report and
in Note 16 above.
18 TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
FIL Investment Services (UK) Limited is the Company’s Alternative Investment
Fund Manager and has delegated portfolio management and the role of company
secretary to FIL Investments International, the Investment Manager. Both
companies are Fidelity group companies.
Details of the current fee arrangements are given in the Directors’ Report
in the Annual Report and in Note 4 above. During the year, fees for portfolio
management services of £1,177,000 (2023: £1,362,000) and secretarial and
administration fees of £50,000 (2023: £50,000) were payable to FII. At the
Balance Sheet date, net fees for portfolio management services of £97,000
(2023: £106,000) and secretarial and administration fees of £13,000 (2023:
£13,000) were accrued and included in other creditors. FII also provides the
Company with marketing services. The total amount payable for these services
during the year was £175,000 (2023: £166,000). At the Balance Sheet date,
marketing services of £87,000 (2023: £18,000) were accrued and included in
other creditors.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and Directors’ fees and taxable expenses relating to reasonable
travel expenses paid to the Directors are given in the Directors’
Remuneration Report in the Annual Report. In addition to the fees and taxable
expenses disclosed in the Directors’ Remuneration Report, £13,000 (2023:
£14,000) of Employers’ National Insurance Contributions was also paid by
the Company. As at 31 December 2024, Directors’ fees of £18,000 (2023:
£18,000) were accrued and payable.
ALTERNATIVE PERFORMANCE MEASURES
The Company uses the following as Alternative Performance Measures which are
all defined in the Glossary of Terms in the Annual Report.
DISCOUNT/PREMIUM
The discount/premium is the difference between the net asset value (“NAV”)
per ordinary share of the Company and the ordinary share price and is
expressed as a percentage of the NAV per ordinary share. Details of the
Company’s discount are on the Financial Highlights in the Annual Report.
GEARING
See the Fair Value and Portfolio Exposure of Investments table on in the
Annual Report for details of the Company’s gearing.
NET ASSET VALUE (NAV) PER ORDINARY SHARE
See the Balance Sheet and Note 15 above for further details.
ONGOING CHARGES RATIO
The ongoing charges ratio is considered has been calculated in accordance with
guidance issued by the AIC as the total of management fees and other expenses
expressed as a percentage of the average net assets throughout the year.
2024 2023
Investment management fees (£’000) 1,648 1,721
Other expenses (£’000) 777 712
--------------- ---------------
Ongoing charges (£’000) 2,425 2,433
Variable management fee (£’000) (471) (359)
Average net assets (£’000) 235,249 245,972
Ongoing charges ratio 1.03% 0.99%
Ongoing charges ratio including variable management fee 0.83% 0.84%
========= =========
REVENUE, CAPITAL AND TOTAL RETURN PER ORDINARY SHARE
See the Income Statement and Note 8 above for further details.
TOTAL RETURN PERFORMANCE
The tables below provide information relating to the NAV per ordinary share
and the ordinary share price of the Company, the imp of the dividend
reinvestments and the total returns for the years ended 31 December 2024 and
31 December 2023.
2024 Net asset Ordinary
value per share
ordinary price
share
31 December 2023 204.46p 185.00p
31 December 2024 200.78p 174.50p
--------------- ---------------
Total return for the year -1.8% -5.7%
========= =========
2023 Net asset Ordinary
value per share
ordinary price
share
31 December 2022 182.24p 164.75p
31 December 2023 204.46p 185.00p
--------------- ---------------
Total return for the year +12.2% +12.3%
========= =========
The Annual Financial Report Announcement is not the Company's statutory
accounts. The above results for the year ended 31 December 2024 are an
abridged version of the Company's full Annual Report and Financial Statements,
which have been approved and audited with an unqualified report. The 2023 and
2024 statutory accounts received unqualified reports from the Company's
Auditor and did not include any reference to matters to which the Auditor drew
attention by way of emphasis without qualifying the reports and did not
contain a statement under s.498 of the Companies Act 2006. The financial
information for 2023 is derived from the statutory accounts for 2023 which
have been delivered to the Registrar of Companies. The 2023 Financial
Statements will be filed with the Registrar of Companies in due course.
A copy of the Annual Report will shortly be submitted to the National Storage
Mechanism and will be available for inspection at:
www.morningstar.co.uk/uk/NSM
The Annual Report will be posted to shareholders later this month and
additional copies will be available from the registered office of the Company
and on the Company's website: www.fidelity.co.uk/japan where up to date
information on the Company, including daily NAV and share prices, factsheets
and other information can also be found.
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
ENDS
Copyright (c) 2025 PR Newswire Association,LLC. All Rights ReservedRecent news on Fidelity Japan Trust
See all newsREG - Fidelity Japan Trust - Net Asset Value(s)
AnnouncementREG - Fidelity Japan Trust - Net Asset Value(s)
AnnouncementREG - Fidelity Japan Trust - Net Asset Value(s)
AnnouncementREG - Fidelity Japan Trust - Net Asset Value(s)
AnnouncementREG - Fidelity Japan Trust - Net Asset Value(s)
Announcement