The investment objective of the Company is to provide shareholders with dividend income combined with capital growth, mainly through investment in equities listed or quoted in Japan.
The Company intends to invest in equities listed or quoted in Japan. The Company may also invest in exchange traded funds in order to gain exposure to such equities. Investment in exchange traded funds shall be limited to not more than 20 per cent. of Gross Assets at the time of investment. The Company may also invest in listed Japanese real estate investment trusts (J-REITs).
The stocks typically fall into three key opportunity sets:
Dividend Growth, which covers companies that have the ability and willingness to, over time, increase the return to shareholders.
Stable Yield, where the individual companies offer a steady dividend yield in excess of that of the market regardless of prevailing economic conditions.
Special Situations, where we identify the potential for change in management attitudes towards shareholders.
The Company may also enter into long only contracts for difference or equity swaps for gearing and efficient portfolio management purposes.
No single holding (including any derivative instrument) will represent more than 10 per cent. of Gross Assets at the time of investment and, when fully invested, the portfolio is expected to have between 30 to 40 holdings although there is no guarantee that this will be the case and it may contain a lesser or greater number of holdings at any time.
The Company will have the flexibility to invest up to 10 per cent. of its Gross Assets at the time of investment in unquoted or untraded companies.
The Company will not be constrained by any index benchmark in its asset allocation.
The Company may use borrowings for settlement of transactions, to meet on-going expenses and may be geared through borrowings and/or by entering into long only contracts for difference or equity swaps that have the effect of gearing the Company’s portfolio to seek to enhance performance. The aggregate of borrowings and long only contracts for difference and equity swap exposure will not exceed 25 per cent. of Net Asset Value at the time of drawdown of the relevant borrowings or entering into the relevant transaction, as appropriate, although the Company's normal policy will be to utilise and maintain gearing to a lower limit of 20 per cent. of Net Asset Value at the time of drawdown of the relevant borrowings or entering into the relevant transaction, as appropriate. It is expected that any borrowings entered into will principally be denominated in Yen.
The Company does not currently intend to enter into any arrangements to hedge its underlying currency exposure to investment denominated in Yen, although the manager and the Board may review this from time to time.