AVI Japan Opportunity – Good governance, better returns

The team behind AVI Japan Opportunity (AJOT) continues to champion what they believe are the tenets of good corporate governance and shareholder alignment. On this front, it recently made some positive progress at NC Holdings AGM. The benefits that it can accrue through improved corporate governance complement what they see as an attractively-valued Japanese equity market, which appears to be increasingly attracting the attention of foreign investors. The missing piece of the puzzle is the weakness of the Yen, which has impacted AJOT’s recent performance.

Whilst there has been a handful of new additions to AJOT’s portfolio, there has been an overall reweighting of the portfolio towards stocks that the manager believes are higher-quality, reducing exposure to some ‘deeper value, lower quality’ names that have sometimes dragged on performance.

AJOT has been able to generate outperformance relative to its peers and index benchmarks over the long term, as well as command strong demand for its shares, with the trust’s share price continuing to trade close to its NAV.