CC Japan Income & Growth Ord
Why is this fund on our radar?
CC Japan Income & Growth (CCJI) was launched in 2015 to capture the significant growth potential of Japanese equities, notably through companies benefitting from the country’s wave of corporate governance reforms, an effort that’s been undergoing since 2013 to increase the standards of its corporate governance culture and company growth prospects. Managed by Richard Aston since inception, the trust focusses on well-run companies that consistently generate cash, have room to grow and are improving how they reward shareholders. These are the types of businesses he believes can steadily build long-term value for investors.
Richard’s disciplined approach combines capital growth and income, building a portfolio that delivers a competitive dividend stream without compromising on the investment quality or long-term growth potential. CCJI has made our list because it has delivered the strongest returns in the AIC Japan sector since launch whilst managing downside risk effectively, showing that a quality-focussed, total-return (a combination of capital and income growth) approach can perform well in Japan over the long term. Dividend growth has also been consistent, growing every year since inception, reflecting both the strength of the underlying businesses and the trust’s commitment to generating reliable income for investors.
Japan’s corporate reforms have been building for more than a decade, and in recent years progress has accelerated. Companies are becoming more accountable and improving how they treat shareholders and view their own long term growth trajectory. The reforms are still ongoing, but the overall trend now looks positive and increasingly backed by real, tangible results. For long-term investors, CCJI offers a focussed, high-conviction way to participate in the country’s structural transformation. It provides both the potential for meaningful capital growth and a differentiated source of income beyond traditional dividend markets like the UK and continental Europe, a compelling blend for those seeking exposure to Japan’s next phase of reform-driven growth.
Skip to Our VerdictPerformance
Since launch in December 2015 to 31/10/2025, CCJI has delivered exceptional results. The trust has achieved an annualised NAV total return of 11.9%, ahead of the TOPIX Index’s 9.6% and the highest within the AIC Japan peer group over the period. We think this reflects the strength of Richard’s disciplined approach, where returns are driven by selective stock picking and a consistent process that balances capital growth with reliable income, even during bouts of volatility or when the strategy temporarily falls out of favour. This consistency has helped the trust maintain sector-leading returns, but also versus the market represented by an ETF in the chart below, as well as an attractive dividend profile without compromising on quality or growth potential.
performance
Past performance is not a reliable indicator of future results
But as with any quality-led strategy, there have been periods of both relative under- and outperformance. The chart above, which includes a relative performance line (red), illustrates this: downward slopes show when the trust lagged the benchmark, upward slopes indicate periods of outperformance. For example, in 2020, growth stocks surged amid a pandemic-driven rerating. CCJI delivered positive returns but lagged the broader market due to limited exposure to high-growth companies whose share prices have become very expensive –businesses Richard typically avoids. Since then, the trust has rebounded, supported by improving earnings, corporate governance tailwinds and shareholder-aligned capital deployment as key return drivers.
Performance over the past year has been mixed but resilient. A short, sharp sell-off early in 2025 following US Liberation Day tariff announcements initially hit CCJI’s higher-growth tech holdings, yet the trust fell less than the broader market and recovered quickly as conditions stabilised. Over the 12 months to 31/10/2025, it delivered a NAV total return of 25.2%, ahead of the TOPIX’s 22.1%. Outperformance was driven by strong stock selection in financials, including Sumitomo Mitsui Financial Group, JAFCO and Sompo Holdings, alongside companies benefitting from governance-led re-ratings, like Fujikura.
Portfolio
The trust follows a disciplined approach to Japanese equities, seeking high-quality, attractively valued opportunities across the market spectrum, with a long-term focus on strong total returns. Rather than chasing the highest-yielding names or following a purely style-driven strategy, Richard targets companies that balance capital growth with dividend potential.
Whilst large-cap holdings remain the core, the portfolio carries a notable bias towards small- and mid-cap companies, an area rich in under-researched, often overlooked opportunities with strong alpha potential. These businesses typically share the same financial hallmarks: robust cash flows, sound balance sheets and clear commitments to shareholder returns, particularly those benefitting from Japan’s ongoing corporate governance reforms. This focus differentiates CCJI from many peers, underpinning both its resilient income profile, with dividends compounding at 7.8% per annum since inception, and its sector-leading long-term returns.
To ensure diversification across both income and capital drivers, the portfolio is structured into three segments: Dividend Growth, comprising companies with solid yields and consistent dividend increases; Special Situations, businesses undergoing operational or management change likely to enhance shareholder returns; and Stable Yield, offering high, well-covered dividends during periods of earnings uncertainty, alongside upside potential as fundamentals improve.
This blend of quality, income and capital growth gives the trust a distinct profile versus peers, combining competitive income with strong performance potential. The portfolio’s fundamentals reinforce this: whilst its holdings may trade at a premium to the TOPIX, it’s supported by higher gross and operating profit margins, stronger balance sheets, superior cash generation and greater overall profitability.
Sector exposure is well balanced. Financials form the largest allocation, spanning banks, insurers and diversified financial services. Here, Richard maintains diversification by balancing traditional banks with strong cash-flow potential, like Sumitomo Mitsui Financial Group, against less rate-sensitive names such as insurer Sompo Holdings and venture capital specialist JAFCO. This approach positions the portfolio to capture opportunities as Japan gradually normalises its interest rate policy, whilst managing risk and diversifying its performance drivers. Chemical and industrial names also feature prominently, alongside selective technology holdings such as semiconductor manufacturers and firms supporting AI innovation.
sector allocation
Our Verdict
Japan’s market finally feels like it’s moving from promise to progress. After decades of deflation and inertia, genuine reform is taking hold: positive inflation has returned, interest rates have normalised and corporate governance standards continue to rise. Companies are deploying capital more efficiently, dividends and buybacks are at record highs, domestic inflows are growing and foreign investors are returning. Whilst challenges remain, from tariff tensions to currency swings, the long-term direction looks increasingly constructive.
In this evolving landscape, we think CCJI offers a compelling way to capture Japan’s transformation. Richard’s disciplined, quality-driven approach focusses on total return, balancing capital and income growth to give investors diversified exposure to the country’s rising profitability and maturing dividend culture. Since launch, the trust has outperformed both its benchmark and peer group, whilst delivering a resilient and steadily growing income stream, rising year-on-year and compounding at an annualised rate of 7.8%.
Japan’s story is still being written, yet the momentum behind reform and corporate change has clearly strengthened. For investors taking a long-term view, we believe CCJI stands out as a differentiated and effective way to participate in Japan’s next chapter of reform-driven growth.
Key Risks
- Given its ‘core’ nature, the trust may underperform during aggressively style-driven markets
- Whilst offering a greater return potential, having a greater exposure towards small- and mid-caps can increase risk
- Its focus on high-growth companies means it may underperform when markets favour cyclical sectors or value-oriented investing
