I'd like to introduce two stocks from the portfolio. The first stock is called Adventist. This is a global leader in semiconductor testing Equipment. It has very high market share of over 50%. It's a duopoly market with Teradyne. Now, trends such as high performance computing products or greater chip complexity means longer testing time also increased testing intensity. Now this is a very positive trend for the mid and long term outlook of testing equipment for the semiconductor industry. The second stock I'd like to introduce is called IHI. This is a heavy industries conglomerate. We are seeing very positive developments in terms of restructuring and refocusing on their core strength. Now on restructuring, the company is doing an excellent job in exiting a number of low performing businesses. At the same time, they are refocusing their resources on two attractive assets one which is aero engines and two defense. Now, on aero engines, we think that's an attractive business with steady recurring revenue backed by spare parts sales, which carry high profitability. It's also an area with high barriers of entry. And then for defense, the outlook of the defense industry is changing in Japan as the Japan government is expanding its defense budget.

The companies included are for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell.

Summary Risk Indicator

The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period.

Investment Objective

Aims to produce capital growth from investment in Japanese companies. The Company has the ability to use gearing to increase potential returns to shareholders. The gearing policy is to operate within the range of 5% net cash to 20% geared, in normal market conditions.

Risk profile

• Exchange rate movements between the pricing currency of the underlying overseas investments held by the Company and sterling (the base currency of the Company) can cause the Company’s NAV (in sterling terms) to go up as well as down. For example, if sterling appreciates relative to Japanese yen, the value of the NAV in sterling terms will be negatively impacted; if sterling depreciates, the value of the NAV in sterling terms will be positively impacted.
• External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.
• This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.
• This Company may also invest in smaller companies which may increase its risk profile.
• The share price may trade at a discount to the Net Asset Value of the Company.
• The single market in which the Company primarily invests, in this case Japan, may be subject to particular political and economic risks and, as a result, the Company may be more volatile than more broadly diversified companies.