PHILADELPHIA, April 13, 2020 /PRNewswire/ -- Aberdeen
Japan Equity Fund, Inc. (NYSE: JEQ) today announced that its Board
of Directors (the "Board") has
approved changes to the Fund's fundamental
investment restriction related to borrowing, which is subject to
stockholder approval. If approved by stockholders, it is currently
expected that the changes to the Fund's fundamental investment
restriction related to borrowing will be implemented in the second
quarter of 2020. Aberdeen Standard Investments (Asia) Limited ("ASIAL"), the Fund's investment
manager, and the Board each believe that the proposed changes
to the Fund's fundamental investment restriction related to
borrowing are in the best interests of the Fund's stockholders.
The Fund also today announced that certain updates have been
made to its principal investment strategies to (i) remove a
minimum market cap restriction of Yen30bn related to securities in which the Fund
is permitted to invest to provide the portfolio management team
more flexibility to invest in small cap companies and (ii) to
describe the manager's evaluation of long term value by examining a
spectrum of considerations such as governance and risk management,
including those risks often referred to as environmental, social
and governance factors ("ESG") and (iii) revise disclosure relating
to temporary investments to bring the Fund in line with other U.S.
registered funds and provide the portfolio management team with
more flexibility to invest in cash and cash equivalents during
stressed market conditions. These changes will take effect
immediately.
These changes are intended to provide the portfolio managers
with additional flexibility to meet the Fund's investment
objective, but no changes to the investment manager's fundamental
investment philosophy or approach will result.
Fundamental Investment Restriction Related to
Borrowing
Currently, the Fund is subject to a fundamental investment
restriction that does not permit borrowing for investment purposes,
commonly referred to as leverage. Under the proposed
fundamental investment restriction related to borrowing, the Fund
would be permitted to borrow for investment purposes as may be
permitted by the Investment Company Act of 1940, or any rule, order
or interpretation thereunder. This would allow the Fund to
borrow for investment purposes in an amount up to 33⅓% of the
Fund's total assets. If the proposal is approved by the
Fund's stockholders, the portfolio management team currently
anticipates using leverage, under normal circumstances, in the
amount of approximately 10%-15% of the Fund's total assets over the
longer term.
Principal Investment Strategies
The updated disclosure of certain of the Fund's investment
strategies is set forth below:
The Fund may invest without limit in the equity securities of
companies of any size, including small-cap and mid-cap
companies.
In carrying out the Fund's investment strategies, the Investment
Manager employs a fundamental, bottom-up investment process, based
on first-hand research and disciplined company evaluation.
Securities are identified for their long-term, fundamental value.
The stock selection process contains two filters, first quality and
then price. In the quality filter, the Investment Manager seeks to
determine whether the company has good growth prospects and a
balance sheet that supports expansion. The Investment Manager also
evaluates matters of long term value by examining a spectrum of
considerations such as governance and risk management, including
those risks often referred to as environmental, social and
governance factors ("ESG"). ESG analysis is fully integrated into
investment decisions for all equity holdings. As such, although ESG
investing is not a principal strategy of the Fund, the Investment
Manager considers and evaluates ESG factors as part of the
investment analysis process and this analysis forms an integral
component of the Investment Manager's quality rating for all
companies. In the price filter, the Investment Manager assesses the
value of a company by reference to financial ratios, and estimates
the value of the company relative to its market price and the
valuations of other potential investments. The Investment Manager
may sell a security when it perceives that a company's business
direction or growth potential has changed or the company's
valuations no longer offer attractive relative value.
Temporary Investments. Generally, the Fund will be
fully invested in accordance with its investment objective and
strategies; however, for purposes of settlement, meeting expenses,
paying dividends or other cash management purposes, or if the
Fund's Investment Manager believes that business, economic,
political or financial conditions warrant, the Fund may invest
without limit in cash, cash equivalents or other short-term
obligations, including the following short-term instruments:
- obligations of the U.S. Government, its agencies or
instrumentalities (including repurchase agreements with respect to
these securities),
- bank obligations (including certificates of deposit, time
deposits and bankers' acceptances) of U.S. banks and foreign banks
denominated in any currency,
- short-term floating rate securities and other instruments
denominated in any currency issued by international development
agencies, banks and other financial institutions, governments and
their agencies and instrumentalities, and corporations located in
countries that are members of the Organization for Economic
Cooperation and Development,
- obligations of U.S. corporations that are rated no lower than
A-2 by Standard & Poor's Rating Group or P-2 by Moody's
Investor Services or the equivalent by another rating service or,
if unrated, deemed to be of equivalent quality by the Investment
Manager, and
- shares of money market funds that are authorized to invest in
short-term instruments described above.
The use of temporary investments prevents the Fund from fully
pursuing its investment objective.
Additional Information
Additional information regarding the proposed changes to the
Fund's fundamental investment restriction related to borrowing will
be included in the proxy statement relating to the Fund's 2020
Annual Meeting and Special Meeting that will filed with the
Securities and Exchange Commission and be mailed to stockholders.
It is anticipated that the meetings will be held in the
second quarter of 2020.
In the United States, Aberdeen
Standard Investments is the marketing name for the following
affiliated, registered investment advisers: Aberdeen Standard
Investments Inc., Aberdeen Asset Managers Ltd., Aberdeen Standard
Investments Australia Ltd., Aberdeen Standard Investments
(Asia) Ltd., Aberdeen Capital
Management, LLC, Aberdeen Standard Investments ETFs Advisors LLC
and Standard Life Investments (Corporate Funds) Ltd.
Closed-end funds are traded on the secondary market through one
of the stock exchanges. The Fund's investment return and principal
value will fluctuate so that an investor's shares may be worth more
or less than the original cost. Shares of closed-end funds may
trade above (a premium) or below (a discount) the net asset value
(NAV) of the fund's portfolio. There is no assurance that the Fund
will achieve its investment objective. Past performance does not
guarantee future results.
If you wish to receive this
information electronically, please contact
Investor.Relations@aberdeenstandard.com
aberdeenjeq.com
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SOURCE Aberdeen Japan Equity Fund, Inc.