AVI Japan Opportunity (AJOT)

AVI Japan Opportunity (AJOT) continues to pursue its activist, engagement-led strategy within Japanese small- and mid-cap companies, targeting balance sheet inefficiencies and governance improvements to unlock shareholder value. Since launch in October 2018, the trust has delivered an annualised NAV total return of 10.3%, well ahead of the 7.2% for the MSCI Japan Small Cap Index, and the strategy has been emulated by many other managers.

The strategy has gained additional scale following the combination with Fidelity Japan (FJV) in November 2025, increasing net assets to approximately £389m. The enlarged base enhances AJOT’s ability to build influential stakes and deepen engagement, attributes central to an activist approach. Capital from the combination was deployed swiftly and selectively, allocated both into existing high-conviction holdings and three new positions, including Foster Electric, where AJOT declared ownership above 5% (see Portfolio).

Despite the combination, the portfolio remains concentrated, with 28 holdings and the top ten accounting for c. 67% of assets, as of its latest factsheet, whilst turnover has been modestly elevated to reflect the deployment of new assets alongside privatisations. The completed combination has been accompanied by a revised tiered management fee structure, making it more competitive in our eyes (see Charges).

Performance over the past 12 months has been mixed. Whilst AJOT generated a positive NAV total return of 10.5% to 03/03/2026 (with the share price rising 12.5% as the discount narrowed), it lagged a particularly strong, momentum-driven advance in the Japanese small-cap index. Company-level catalysts remained evident, including tender offers, asset disposals and buybacks across several holdings, although some positions detracted amid operational transitions and delayed reratings.

At the time of writing, AJOT trades on a discount of 2.9%, compared to its average five-year Discount of 1.5%.