Fund of the week: Good value in Japanese small caps

This trust's approach to investing in dynamic small-cap Japanese stocks has earnt itself an impressive rate of return.

Japan's Nikkei index has just had its best first quarter in 24 years, rising by 19.3%. "Despite the events of 2011, some areas of the Japanese economy experienced impressive rates of expansion, including e-commerce, smart phones and energy-efficient products," John MacDougall, manager of Baillie Gifford Shin Nippon Investment Trust (LSE: BGS), tells Investors Chronicle.

The Shin Nippon (literally New Japan') fund focuses on smaller firms, those with a market cap of below 150bn (£1.2bn). It has a three-year annualised share price total return of 32.53%. It looks for firms with "dynamic management" in high-growth sectors, such as healthcare and outsourcing.

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