3 Best Performing Japan Funds

As Morningstar analysts determine what the next 12 months hold for Japan we look at the funds that have best captured the stock market rally so far

Cyrique Bourbon 3 February, 2014 | 3:50PM
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Invesco Japanese Equity Advantage

The Invesco Japanese Equity Advantage fund carries a Morningstar OBSR Analyst Rating of Bronze. It ranks amongst the largest funds in the sector and has limited capacity. The fund is managed by Tadao Minaguchi who uses a distinct long-term and bottom-up investment approach. In essence, he invests across the market cap scale in attractively-valued companies which make advantageous use of their capital and intangible assets, resulting in a strong free cash flow which in turn should create shareholder value. Whilst this gives the fund a quality bias, the portfolio is diversified across most sectors and stock selection has been strong resulting in the fund holding up well in 2012 and 2013.

CC Japan Alpha

The CC Japan Alpha fund does not carry a Morningstar OBSR Analyst Rating. The fund is managed by Jonathan Dobson, who has 20 years of experience investing in Japanese equities. He invests across the market cap spectrum in a concentrated portfolio of around 30 stocks and has a distinct high conviction approach. The manager is willing to use cash and derivatives extensively to reduce the downside. Since inception in 2007, the fund is ahead of the Topix thanks to an exceptional 2013 during which the fund outperformed the index  by circa 20%, most of which occurred in  the sharp rally of Japanese equities in the first half of the year.

Orbis Japan         

The Orbis SICAV Japan Equity (Yen) fund carries a Morningstar OBSR Analyst Rating of Silver. The fund is managed by the firm’s well-resourced investment team. The bottom-up approach is long-term and somewhat contrarian in nature with the team looking for good quality companies trading at discounts to their intrinsic value. The approach has historically provided investors with downside resilience, as evidenced by the strong relative outperformance in 2011. However, the fund has also held up well in the recent rally thanks to a bias towards domestic-oriented companies which have performed strongly in a year where exporters have enjoyed mixed fortunes.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
CC Japan Alpha B GBP14.44 GBP0.72
Orbis SICAV Japan Eq (Yen)10,249.18 JPY2.20Rating

About Author

Cyrique Bourbon  is multi-asset portfolio manager for Morningstar Investment Management EMEA

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