Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by CC Japan Income & Growth. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

A new version of this profile is available. View Latest

The CC Japan Income & Growth Trust (CCJI) aims to provide shareholders with dividend income combined with capital growth, mainly through investment in equities listed or quoted in Japan. Managed by Richard Aston at Coupland Cardiff Asset Management LLP, CCJI typically comprises a portfolio of between 30-40 stocks and is the only Japanese equity income focused UK listed investment trust.

The investment process, as discussed under Portfolio, seeks to identify attractive stocks through a mixture of quantitative and qualitative inputs. A common feature is a focus on identifying high quality companies with resilient cashflows and strong management teams, which have demonstrated strong consideration for shareholder interests.

Ongoing corporate governance reforms in Japan have continued to improve conditions for income investors in what has traditionally been a challenging market, and Richard believes there remains significant future income growth.

The resulting portfolio presently offers the highest dividend yield (c. 3.6%) derived from income earnings of any investment trust within the AIC Japan sectors. The board recently announced that it intends to at least match the previous year’s dividend of 4.5p per share. This dividend has been growing in recent years yet has remained well covered. Furthermore, the trust has an exceptionally deep ‘special reserve’ to support dividends going forward. Gearing is employed structurally to further boost returns.

The discount has widened to an anomalously wide (at c. 12.4%) level relative to the trust’s history, in part reflecting disappointing performance in a challenging environment. However, this environment has been exceptional and atypical relative to CCJI’s history, as outlined in the Performance section.

Analyst's View

We think CCJI is an interesting way to diversify sources of income. While the dividend yield is not particularly high in absolute terms, it is attractive relative to the Japanese market. This is particularly so given the defensive characteristics of many of the underlying earnings streams and the fact that the dividend has been well covered in recent years. We would take the view a dividend cut is unlikely, particularly when the dividend is well supported by the revenue reserve and the ‘special reserve’. In the event that earnings were to be sufficiently impaired that the dividend were no longer covered, the idiosyncratic nature of the current crisis would perhaps justify using reserves to support it.

Following disappointing recent NAV performance, the discount is now particularly wide, especially when we consider the previously strong performance of the strategy. We believe the stockpicking approach offers downside protection in ordinary market conditions, allowing a structurally geared portfolio to trade at a beta to the benchmark of c. 1 historically. From launch in 2015 until the coronavirus crisis hit, CCJI significantly outperformed the index in NAV total return terms. Recent conditions have not been ordinary and have undoubtedly impacted performance. Trends can prove durable in the Japanese market, but the discount and dividend yield suggest a potentially attractive long-term entry point, with the latter offering investors the ability to at least ‘get paid whilst they wait’.

bull bear
Dividend stream looks secure, and is available at a discount at present Gearing can exacerbate downside as well as amplify upside - and has done so
Corporate governance reform remains a compelling potential driver of long-term returns Seeming 'vindication' of holding significant cash on balance sheets may challenge reform agenda
Currently trading at a discount, having more often traded at a slight premium Likely to continue to lag without rotation in market leadership in Japan
Continue to Portfolio

Fund History

06 May 2022 The Land of the Falling Yen
A cheaper currency is unlikely to change long-term trends in Japan…
20 Apr 2022 On the hunt
We review discounts in the investment trust space against a backdrop of harsh conditions...
02 Mar 2022 Fund Analysis
CCJI has outperformed its peers and the TOPIX index over the last 12 months, while offering a consistent source of income…
21 Jan 2022 Investing in Japan using investment trusts
How investment trusts can help you invest in Japanese stocks…
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
15 Sep 2021 Bargains galore
We review our discounted opportunities portfolio, with one constituent rallying more than 30% in just two months…
18 Aug 2021 Fund Analysis
CCJI has recently outperformed its peers and benchmark, while still being the highest-yielding trust in its sector…
14 Jul 2021 Grade inflation
We look at how our discounted opportunities portfolio has done in the first half of the year and update on the performance of our long-term rated funds…
02 Jun 2021 Fortune favours the brave (sometimes)
Our research suggests wide discounts often herald high NAV returns too…
05 May 2021 Vive la revolution
For thirty years quality has had a structural tailwind; but revolt is in the air and value is on the barricades…
14 Apr 2021 Wide Boys
We review our portfolio of chonky discounts as one star performer hits its target…
24 Mar 2021 Shoot to Thrill: ISA targets for long term growth
We all intend to invest for the long-term but can often be distracted by the news...
16 Mar 2021 Fund Analysis
Offering the highest yield in the sector, CCJI focusses on quality Japanese companies capitalising on corporate reforms...
02 Dec 2020 Can you teach an old dog new tricks?
Cheap companies in Japan are drowning in what cheap companies elsewhere would kill for: buckets of cash…
01 Oct 2020 Alternatives for Income Investors
Slides and audio from our event focused on alternative routes to a reliable income…
30 Sep 2020 Slides and Audio: CC Japan Income & Growth
View the presentation and listen to the audio from our 'Alternatives for Income Investors' event on 29 September...
20 Aug 2020 Alternatives for income investors
In a world where dividend are under unprecedented pressure, our income focused online event in September should provide serious food for thought…
13 Aug 2020 Underground bangers
We look for hidden gems in the smaller end of the investment trust universe...
29 Jul 2020 To be, or not to be (geared), that is the question
Gearing is part of the toolkit that trusts use to outperform OEICs. But how is it best implemented?...
30 Jun 2020 Fund Analysis
With the highest yield in its sector, CCJI aims to take advantage of long-term shifts in the way Japanese companies are managed...
05 Sep 2018 Fund Analysis
The strategy aims to take advantage of a secular shift towards shareholder-friendly policies, including dividends and buybacks, in corporate Japan...
05 Sep 2018 Bullseye
The third arrow of Shinzo Abe's grand plan, corporate reform, could have significant implications for undervalued Japanese equities...
View all

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
Please enter a valid password
Please enter a valid email address
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
Please enter a company name
Please enter a location name
Please choose an option
Please enter a platform
Please choose an option
Please enter a trust
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
Please select an option
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
Please enter your first name
Please enter your last name
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
Please enter a valid password
Please enter a valid password
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.