Overview

The Neptune Japan Equity Fund offers investors exposure to Japan’s multinational companies, many of which dominate their global industries and derive the majority of their revenues from overseas. As a result, they are able to benefit from the translation benefits of a weak yen, enabling faster revenue growth. The Japan Equity Fund is a mirror portfolio of the Neptune Japan Opportunities Fund’s holdings but without the portfolio-wide yen hedge, allowing investors to manage their currency exposure according to their own investment views via different currency share classes.

Investment objective

To provide capital growth by investing predominantly, being 80% or more, in a focused portfolio of approximately 40-60 Japanese companies, selected at the manager's discretion.

There is no assurance that the investment objective will be achieved.

Ongoing charge (%) 0.90
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00BXDZFF23
Bloomberg NJAPICG:LN
SEDOL BXDZFF2

Fund managers

Chris Taylor

Fund Manager

Storm Uru

Deputy Manager
  • Role at Neptune

    Fund Manager

  • Time at Neptune

    4 years

  • Research focus

    Industrials

George Boyd-Bowman

Assistant Manager
  • Role at Neptune

    Investment Director, Head of US Equities

  • Time at Neptune

    8 years

  • Research focus

    Financials

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs Launch
Fund -8.94 -12.27 -11.25 39.48 29.40
Benchmark -6.95 -2.38 -0.36 45.61 45.16
IA sector -8.35 -4.84 -2.54 43.45 42.38
IA rank 52/76 73/75 73/75 49/70 62/68
Quartile 3 4 4 3 4
Large chart

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund - - - 32.14 21.63
Benchmark - - - 23.41 15.60
IA sector - - - 22.36 18.39
IA rank - - - 7/71 22/73
Quartile - - - 1 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. The performance of other share classes may differ.

IA sector rankings may change at any time as a result of closure, movement between sectors or price amendments by competitor funds. The Fund's IA sector is IA Japan and the benchmark is TOPIX Index. Neptune’s funds are not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason, the comparison index should be used for reference only.

This Fund may have a high historic volatility rating and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you and your clients may not get back the original amount invested.

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund - - - 32.14 21.63
Benchmark - - - 23.41 15.60
IA sector - - - 22.36 18.39
IA rank - - - 7/71 22/73
Quartile - - - 1 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. The performance of other share classes may differ.

IA sector rankings may change at any time as a result of closure, movement between sectors or price amendments by competitor funds. The Fund's IA sector is IA Japan and the benchmark is TOPIX Index. Neptune’s funds are not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason, the comparison index should be used for reference only.

This Fund may have a high historic volatility rating and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you and your clients may not get back the original amount invested.

Portfolio

Data as at 31/10/2018

Top ten holdings (%)

FundIndex
Nintendo 5.39 0.93
Keyence 4.50 1.16
JX Holdings 3.51 0.56
Mitsubishi Gas Chemical Company 3.25 0.08
Bandai Namco 3.08 0.18
Haseko 3.07 0.09
Mitsubishi Chemical Holdings 3.01 0.25
Taisei 2.96 0.23
Toyota Motor 2.82 3.16
Toshiba Plant Systems & Services 2.74 0.02

Sector (%)

FundIndex
Industrials 26.0 22.4
Materials 19.3 6.7
Information technology 12.7 10.1
Financials 10.6 12.2
Consumer discretionary 10.4 18.1
Communication services 5.4 7.6
Energy 3.5 1.3
Real estate 3.4 2.9
Consumer staples 0.0 9.2
Healthcare 0.0 7.7
Utilities 0.0 1.9
Cash 8.7 0.0

Top ten holdings (%)

FundIndex
Nintendo 5.39 0.93
Keyence 4.50 1.16
JX Holdings 3.51 0.56
Mitsubishi Gas Chemical Company 3.25 0.08
Bandai Namco 3.08 0.18
Haseko 3.07 0.09
Mitsubishi Chemical Holdings 3.01 0.25
Taisei 2.96 0.23
Toyota Motor 2.82 3.16
Toshiba Plant Systems & Services 2.74 0.02

Sector (%)

FundIndex
Industrials 26.0 22.4
Materials 19.3 6.7
Information technology 12.7 10.1
Financials 10.6 12.2
Consumer discretionary 10.4 18.1
Communication services 5.4 7.6
Energy 3.5 1.3
Real estate 3.4 2.9
Consumer staples 0.0 9.2
Healthcare 0.0 7.7
Utilities 0.0 1.9
Cash 8.7 0.0

    Active share

    Active share 80.9%

    The Active Share is a measure of how different a portfolio is from its benchmark, i.e. how 'actively managed' a fund is relative to its respective Index. A score of 100% indicates the fund's holdings are completely different, whilst 0% indicates the portfolio exactly replicates the Index.

    Number of holdings

    No. of holdings 41

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q3 2018

    Market overview

    The Fund’s relative underperformance in the third quarter came principally from its equity holdings, which rose by 0.2% largely due to not being invested in the healthcare, telecoms and energy sectors which performed better than the overall market. By contrast, the Fund was overweight in the industrials, materials and IT sectors which did relatively badly.

    The TOPIX traded between 1,680 and 1,780 before finally rallying through to 1,800 and closing at its high for the period of 1,840. This trading pattern merely reflected the negative sentiment engendered by ongoing trade and tariff fears combined with firming oil prices, implying that corporate profits would grow less than initially expected. That said, this quarter saw the comprehensive outperformance by the larger stocks for the first time this year, despite the global headwinds. Domestic consumer-oriented sectors fared best, but the ongoing rebound in capital equipment investment appears to be largely ignored by market participants. Meanwhile, it appears the small stock rally over the last few years is coming to an end. Their valuation levels are now exceeding those of the other capitalisation bands whilst their prospects are similar.

    In the short term, we expect the market to remain volatile in the face of the impending US mid-term elections on 6 November. Unless the Democrats gain both the House of Representatives and the Senate, we fully expect the market to recover. We believe global growth fears will abate, Japanese third quarter earnings results will remain strong, the oil price will weaken and that market ratings will have dropped sharply from their mid-January peak.

    Furthermore, over the coming months and years, we still expect the yen to gradually weaken as interest rates elsewhere begin to be consistently raised, whilst those in Japan remain at current levels. Likewise, economic growth rates will show similar patterns as Japan drifts, based on the lack of sustained wage growth and the country’s negative demographics. Moreover, the October 2% rise in the VAT rate to 10% will reinforce these negative trends.

    Outlook

    The Neptune Japan Equity Fund will remain overweight in large, well-financed, industry-dominant Japanese multi-nationals that are set to benefit most from the currency’s likely weakening.

    Chris Taylor

    Fund Manager

    The Fund will remain overweight in large, well-financed, industry-dominant Japanese multinationals that are set to benefit most from the currency’s likely weakening

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 125.70 -1.02 14/12/2018
    C Acc GBP Hdg 89.58 -1.69 14/12/2018
    C Acc EUR Hdg 93.19 -1.70 14/12/2018
    C Acc USD Hdg 95.46 -1.68 14/12/2018
    D Acc GBP 97.55 -1.06 14/12/2018

    Neptune funds are priced every working day at 12 noon UK time and prices should be updated here by 6pm the same day.

    The prices shown should be taken only as an indication of the value of shares. Prices are set on a forward-pricing basis which means that any instruction to buy or sell shares will be fulfilled at the price set at 12 noon the next day.

    If you are looking for historical prices of closed funds or share classes, or are having any difficulty finding the price information you require, please call our customer services team on 0800 587 5051.

    Literature

    Codes & fees

    ISIN SEDOL Bloomberg Ongoing charge (%)
    C Acc GBP GB00BXDZFF23 BXDZFF2 NJAPICG:LN 0.90
    C Acc GBP Hdg GB00BXDZFG30 BXDZFG3 NJPICGH:LN 0.96
    C Acc EUR Hdg GB00BXDZFJ60 BXDZFJ6 NJAICEH:LN 0.94
    C Acc USD Hdg GB00BXDZFL82 BXDZFL8 NJPICUH:LN 0.92
    D Acc GBP GB00BDHXQZ93 BDHXQZ9 NEJPDAG:LN 0.79

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