Which Japan fund takes the top position?
As Japan takes centre stage of host of the 2020 Tokyo Olympics, how have Japanese equity funds performed?
According to FE Analytics, there were four funds which focused exclusively on Japan. These were Platinum Japan, BetaShares WisdomTree Japan ETF Currency Hedged, BlackRock iShares MSCI Japan ETF and Pendal Japanese Share.
Over one year to 30 June, 2021, the best-performing of the four funds had been BetaShares which returned 36.8%.
This was followed by Platinum, which returned 18.9%, Pendal which returned 17% and BlackRock iShares in fourth place with returns of 14.7%.
The wider Asia Pacific single country sector, within the Australian Core Strategies universe, returned 31%.
Over three years to 30 June, the best-performing fund was also BetaShares, with returns of 28.2% followed by Pendal, BlackRock iShares and Platinum. However, all four funds underperformed the sector which returned 35.4%.
In its most recent factsheet, the BetaShares fund said it sought to access globally-competitive Japanese stocks and provide diversified exposure including to sectors which were under-represented in the Australian market.
The fund’s largest sector weighting was 31.4% allocated to consumer discretionary followed by 22.7% to information technology.
Meanwhile, Platinum Japan manager, James Halse said the fund had exposure to growth cyclicals and deep value plays and that it was pleased by Japanese companies adopting more shareholder friendly policies and improving returns on equity.
“The key to the long-term outlook for the Japanese market, however, is the likely continued improvement in corporate governance, and thus capital allocation and shareholder returns,” he said.
“Around 31% of reasonably investable Japanese stocks trade below their net book value, implying weak profitability and/or lazy balance sheets. This dynamic means improvements in returns on equity should not be difficult to achieve and should provide a tailwind to the Japanese market over the medium to long-term.”
AUTHOR
Laura Dew
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