'Consolidator' Nippon Active Value posts 6.7% rise to NAV total return for first half of 2023
The trust has become a 'consolidator' within the AIC Japan sector.
Over the period, NAV total return grew by 6.7% while share price total return soared 23.2%, which also reflected a fall in its discount from 16.3% to 3.6%, the trust noted in its H1 2023 results today (31 August).
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By comparison, the MSCI Japan Small Cap index in sterling terms only rose by 0.4% over the period, NAVF said.
Since the trust's inception in February 2020, its NAV has increased by 53.4% and its share price has risen by 45.3%, compared to the index return of 8.5%.
NAVF chair Rosemary Morgan attributed the positive half-year results to the Japanese market rallying to the highest level since 1990 in local currency terms, even though the continued loose monetary policy has further weakened the yen.
She added: «In contrast to concerns in other developed markets about the likelihood of continued increases in interest rates to combat stubborn inflationary pressures, the end of deflation in Japan is positive for the economy, while the end of Covid restrictions in China is positive for Japanese exports and inward bound tourism.
»Berkshire Hathaway's enthusiasm for Japanese equities, albeit focused on a narrow sector, was widely covered. Overseas investors have been significant net buyers of yen assets, while domestic retail investors responded well to the announcement of an extension of tax-efficient individual investment accounts, NISAs [Nippon Individual Savings Account]. While increased investment flows have benefited larger companies more than the small to mid-cap equities that are the focus of NAVF, continuing news flow about corporate governance initiatives has provided support for an
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