CC Japan Income Growth Trust PLC Fund Data

The NAV per share of CC Japan Income & Growth Trust fell by -10.81% in March, whilst the share price fell -12.45% and the Topix TR Index fell -10.71%, (all returns on a total return, sterling adjusted basis), These sorts of drawdowns, though unpleasant for all stakeholders, are an inevitable part of investing in equities. We would argue that the Trust is made up of a collection of higher quality companies relative to the overall market, whose balance sheet strength, cash flow generation, and strong shareholder return profiles may each help limit downside. This is all very well in falling markets, but it is just as important to keep up in the good times, and that is where our focus on growth attributes comes in. It is the combination of investing in companies who each exhibit all the aforementioned characteristics that we believe stands us in good stead to continue to perform over the long run. Our structural, 20% gearing position reflects our confidence in the long-term investment case for Japanese equities. Markets are suffering from a particularly acute bout of mood swings – a symptom of the war in the Gulf. Volatility can often present opportunities as indiscriminate buying or selling dislocates price from value. Though we have not added any new names to the portfolio so far, we have been using market movements to manage position sizing. We have continued to trim strong performers such as Fujikura, and add to underperformers such as SMC Corp. Perhaps the key concern for Japan, and for all other energy importers, is the risk of an inflationary shock. Japan has reserves to last most of 2026, but as each day passes the risk of rising prices reaching the consumer increases. We have written extensively on inflation, and in December's newsletter we explained our thesis surrounding the need to invest in companies with pricing power. Should the Strait of Hormuz remain closed, our thesis only strengthens. We believe we were invested in the right businesses to thrive in an inflationary environment even prior to the outbreak of war. As for stock specific news, Tokio Marine Holdings was the top contributor over the month, rallying sharply on the news of a strategic investment from Berkshire Hathaway. This has a two-fold positive effect of validating the valuation of the shares whilst also offering the prospect of business synergies. Berkshire's involvement should allow Tokio Marine to return more capital to shareholders and simultaneously accelerate growth - a posterchild for our income and growth strategy.

The NAV per share of CC Japan Income & Growth Trust fell by -10.81% in March, whilst the share price fell -12.45% and the Topix TR Index fell -10.71%, (all returns on a total return, sterling adjusted basis), These sorts of drawdowns, though unpleasant for all stakeholders, are an inevitable part of investing in equities. We would argue that the Trust is made up of a collection of higher quality companies relative to the overall market, whose balance sheet strength, cash flow generation, and strong shareholder return profiles may each help limit downside. This is all very well in falling markets, but it is just as important to keep up in the good times, and that is where our focus on growth attributes comes in. It is the combination of investing in companies who each exhibit all the aforementioned characteristics that we believe stands us in good stead to continue to perform over the long run. Our structural, 20% gearing position reflects our confidence in the long-term investment case for Japanese equities. Markets are suffering from a particularly acute bout of mood swings – a symptom of the war in the Gulf. Volatility can often present opportunities as indiscriminate buying or selling dislocates price from value. Though we have not added any new names to the portfolio so far, we have been using market movements to manage position sizing. We have continued to trim strong performers such as Fujikura, and add to underperformers such as SMC Corp. Perhaps the key concern for Japan, and for all other energy importers, is the risk of an inflationary shock. Japan has reserves to last most of 2026, but as each day passes the risk of rising prices reaching the consumer increases. We have written extensively on inflation, and in December's newsletter we explained our thesis surrounding the need to invest in companies with pricing power. Should the Strait of Hormuz remain closed, our thesis only strengthens. We believe we were invested in the right businesses to thrive in an inflationary environment even prior to the outbreak of war. As for stock specific news, Tokio Marine Holdings was the top contributor over the month, rallying sharply on the news of a strategic investment from Berkshire Hathaway. This has a two-fold positive effect of validating the valuation of the shares whilst also offering the prospect of business synergies. Berkshire's involvement should allow Tokio Marine to return more capital to shareholders and simultaneously accelerate growth - a posterchild for our income and growth strategy.