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AVI Japan Opportunity Trust Outperforms Benchmark On Stronger Yen

(Alliance News) - AVI Japan Opportunity Trust PLC on Monday said it outperformed its benchmark ...

Alliance News 16 September, 2019 | 11:54AM
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(Alliance News) - AVI Japan Opportunity Trust PLC on Monday said it outperformed its benchmark index in its first reviewed period since listing on the London Stock Exchange in September last year, helped by a stronger yen.

For the period from October 23, 2018 to June 30, the trust reported a net asset value total return of 3.8%, compared to the MSCI Japan Small Cap Index, which returned 0.1% in the same period.

Net asset value per share as at June 30 was 101.7 pence, and AVI Japan's share price on the same date was 107.0p, reflecting a 5.2% premium to net asset value.

Shares in AVI Japan Opportunity Trust were down 1.2% on the day Monday at 100.56 pence, having declined since the period-end.

The trust said that its total return performance was driven by the strengthening of the yen, which more than offset in sterling terms a lacklustre performance from Japanese equities during the period.

Particular detractors include automobiles components producer Hi-Lex Corp, which suffered from a poor operating performance, and electronic chemicals producer C Uyemura & Co Ltd, whose share price was hindered by market concern over stagnant smartphone sales.

"Fears of a weakening in the outlook for global growth were compounded by the trade dispute between the US and China. Japan, and particularly small-cap stocks, have a high degree of correlation to global trade and thus the broad market environment over this period has been challenging," said Joe Bauernfreund, of investment manager Asset Value Investors Ltd.

"It has been over four years since the Corporate Governance and Stewardship Codes were introduced in Japan. During that time, the pace of change has been slow. Many foreign investors have given up hope of Japan ever changing, and this has led to a sustained period of capital outflows from the Japanese stock market. However, there is compelling evidence of positive change in Japan. Your company is very well placed to benefit from this change," Bauernfreund added.

By Dayo Laniyan; dayolaniyan@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
AVI Japan Opportunity Ord 111.00 GBX 0.00 -

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