Aberdeen Asset Management’s Japan Investment Trust appears to be one to watch, boasting a solid performance; share prices have risen 5.7% over the past 3 months and are up 41.14% on the year.
Their biggest holdings include Japan Tobacco (4.9%), Shin-Etsu Chemical (4.6%) FANUC (4.5%), with 28% of the fund in the consumer goods sector, 21.3% in industrials and 12.6% consumer Services.
The fund’s aim is to “achieve long-term capital growth principally through investment in listed Japanese companies”. In October 2013, the company moved from an All Asia to a Japan only mandate; however, this doesn’t appear to have affected performance
The fund manager reports that Japanese equities had a positive month, rising in May and buoyed by stronger US economic data, as well as China’s decision to cut interest rates and liberalise its capital markets further. The yen’s continuing depreciation against the US dollar also enticed foreign buyers who felt that a more competitive exchange rate would favour exporters and flatter earnings because of a positive translation effect. Economic news was somewhat upbeat and the labour market remained tight, with the jobless rate falling to an 18-month low.
Japanese car giant Toyota announced plans to buy back shares for the first time in five years, repurchasing a stake of 350 billion yen; their operating profits continued to grow despite a decline in sales, signalling positivity for the Japanese economy.
However, Looking ahead, the fund’s report suggests that Japan’s economic growth is likely to slow: although first-quarter GDP growth was underpinned in part by business spending, it was also flattered by a substantial build-up in inventory. However, if the fund’s past performance is anything to go by, it may still be an opportunity worth investigating.