Edinburgh-based investment firm Baillie Gifford has added to its Japanese fund range with the launch of the Baillie Gifford Japanese Income Growth Fund.

Baillie Gifford had assets under management and advice of about £123 billion ($179 billion) as at March 31 — of which more than £5.2 billion is managed by the firm’s Japanese stocks team.

The new fund will managed by Matthew Brett, a member of Baillie Gifford’s experienced Japanese equities team.

The firm said that its Japanese stocks team has invested in good quality Japanese businesses with strong prospects for earnings growth for decades.

“The same proven process is being applied to the new Baillie Gifford Japanese Income Growth Fund, which identifies attractive investments and constructs a portfolio from these names with a bias towards income,” said the firm, which employs 900 people.

“The Japanese Income Growth Fund provides investors with an opportunity to benefit from a widespread secular change in corporate attitudes to shareholder returns in the Japanese market. The fund has a portfolio currently yielding 2.5%.”

Brett said: “We believe that our focus on companies with good growth prospects and strong balance sheets gives the best opportunity for dividend growth over the medium term.

“We are seeing improving attitudes to corporate governance in Japan.

“Shareholder pay outs are increasing and there is scope for this trend to continue for many years.

“Our new fund aims to generate strong long-term total returns as well as provide investors with a higher yield than the Japanese market.”