Overview

The Neptune Japan Opportunities Fund offers investors exposure to Japan’s multinational companies, many of which dominate their industries globally and derive most of their revenues from overseas. As a result, they are able to benefit from the translation benefits when the yen weakens, enabling faster revenue growth. The portfolio has a long-held currency hedge in place to protect potential gains should the yen weaken.

Investment objective

To provide capital growth by investing mainly 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 (%) 0.87
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B3Z0Y815
Bloomberg NEJPOCG:LN
SEDOL B3Z0Y81

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 5 yrs 10 yrs 15 yrs Launch
Fund 0.6 7.2 -12.2 24.0 22.1 63.5 189.7 323.2
Benchmark 2.8 4.4 -1.8 41.4 75.1 148.6 136.9 209.0
IA sector 2.1 5.1 -3.5 39.3 69.4 146.8 112.5 170.8
IA rank 65/74 14/74 72/74 67/70 61/62 48/48 5/33 6/30
Quartile 4 1 4 4 4 4 1 1
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 5.3 -2.2 2.6 26.9 -24.1
Benchmark 2.7 18.2 23.4 15.6 -8.4
IA sector 1.1 16.8 22.5 18.4 -11.3
IA rank 5/60 64/64 68/71 9/73 76/77
Quartile 1 4 4 1 4

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 30/09/2002, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 03/10/2012, so during the period from 30/09/2002 to 03/10/2012 the performance record is based on the pre-existing A Accumulation share class. Reported date prices used for cumulative and discrete performance tables. 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 (%)

2014 2015 2016 2017 2018
Fund 5.3 -2.2 2.6 26.9 -24.1
Benchmark 2.7 18.2 23.4 15.6 -8.4
IA sector 1.1 16.8 22.5 18.4 -11.3
IA rank 5/60 64/64 68/71 9/73 76/77
Quartile 1 4 4 1 4

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 30/09/2002, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 03/10/2012, so during the period from 30/09/2002 to 03/10/2012 the performance record is based on the pre-existing A Accumulation share class. Reported date prices used for cumulative and discrete performance tables. 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 31/03/2019

Top ten holdings (%)

FundIndex
Keyence 5.97 1.48
Nintendo 4.45 0.85
Bandai Namco 4.04 0.24
Taisei 3.29 0.25
Nippon Paint 3.22 0.15
Haseko 3.18 0.09
SUMCO 3.16 0.06
Okuma Corporation 2.94 0.03
Mitsubishi Gas Chemical Company 2.86 0.07
Mitsubishi Chemical Holdings 2.84 0.22

Sector (%)

FundIndex
Industrials 29.3 22.7
Materials 20.0 6.4
Information technology 15.6 10.7
Consumer discretionary 10.9 17.3
Financials 9.4 10.7
Communication services 4.4 8.1
Real estate 4.1 3.1
Energy 2.5 0.9
Consumer staples 0.0 9.4
Healthcare 0.0 8.8
Utilities 0.0 2.0
Cash 3.8000 0.0

Top ten holdings (%)

FundIndex
Keyence 5.97 1.48
Nintendo 4.45 0.85
Bandai Namco 4.04 0.24
Taisei 3.29 0.25
Nippon Paint 3.22 0.15
Haseko 3.18 0.09
SUMCO 3.16 0.06
Okuma Corporation 2.94 0.03
Mitsubishi Gas Chemical Company 2.86 0.07
Mitsubishi Chemical Holdings 2.84 0.22

Sector (%)

FundIndex
Industrials 29.3 22.7
Materials 20.0 6.4
Information technology 15.6 10.7
Consumer discretionary 10.9 17.3
Financials 9.4 10.7
Communication services 4.4 8.1
Real estate 4.1 3.1
Energy 2.5 0.9
Consumer staples 0.0 9.4
Healthcare 0.0 8.8
Utilities 0.0 2.0
Cash 3.8000 0.0

    Active share

    Active share 83.0%

    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 43

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q4 2018

    Market overview

    The Fund’s underperformance came principally from its equity holdings, largely due to not being at all invested in the healthcare, telecoms and energy sectors which all did better than the overall market. By contrast, the Fund was overweight in the industrials, materials and IT sectors which did relatively badly. A strong yen meant that the Fund’s hedge contributed to around another -5% points of underperformance.

    The TOPIX Index, in line with the rest of the world’s markets, had a poor closing quarter to the year. The Index began October at its high of around 1,800 and then traded down to 1,600 by the end of the month ahead of the November US mid-term elections and fears of heavy Republican losses. Thereafter, the Index spent the next 6 weeks ranging between 1,600 and 1,700 as investors were in turn optimistic or pessimistic regarding US/China trade negotiations and tariff outcomes. A final swoon was seen in the run up to Christmas with the Index hitting a low of around 1,400 before regaining the 1,500 level by year-end.

    Portfolio attribution

    As in the previous quarter, the larger stocks continued their outperformance of the more speculative areas of the market, despite the global headwinds. Some of this was due to the smaller firms average valuation levels now exceeding those of the other capitalization bands. In the short term, we expect the market to remain volatile in the face of the continued US China trade impasse. Some relief came from the Republicans gaining seats in the Senate and despite their losses in the Senate. In addition it is likely both US and Japanese Q4 earnings will not prove to be a disaster whilst fears of a global slowdown will also prove to be wide of the mark. Recent oil price weakness will begin to feed through into growth whilst in the meantime valuations 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. The impending February 2019 “shunto” wage talks will also indicate whether the middle class will see any improvement in their real take-home pay.

    Outlook

    Given such developments are likely to trigger renewed yen weakness, the Neptune Japan Opportunities Fund’s long-held strategy of hedging the yen back into sterling will remain in place as we expect this feature will help underwrite a multi-year recovery in Japanese corporate profits. As such, 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.

    Chris Taylor

    Fund Manager

    larger stocks continued their outperformance of the more speculative areas of the market, despite the global headwinds

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 205.80 -0.82 18/04/2019
    C Acc USD 142.40 -1.11 18/04/2019
    A Acc GBP 415.90 -0.83 18/04/2019
    A Acc USD 134.60 -1.10 18/04/2019
    B Acc GBP 444.20 -0.85 18/04/2019
    D Acc GBP 121.60 -0.82 18/04/2019

    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 GB00B3Z0Y815 B3Z0Y81 NEJPOCG:LN 0.87
    C Acc USD GB00B60T5J23 B60T5J2 NJPOBAU:LN 0.86
    A Acc GBP GB0032076043 3207604 CFNJOAA:LN 1.73
    A Acc USD GB00B60T5H09 B60T5H0 NJPOAAU:LN 1.72
    B Acc GBP GB0032076159 3207615 CFNJOBA:LN 1.23
    D Acc GBP GB00BFZC7603 BFZC760 NEJPDJY:LN 0.77

    Contact us

    Japan ‘Golden Week’ – Temporary Stock Market Closure

    The Japanese stock market will be closed between the 29th April 2019 and the 6th May 2019 due to a longer than usual bank holiday period, referred to as the Japan ‘Golden Week’.

    As per our prospectus, Neptune has taken the approach to apply non-dealing days across this period for the Neptune Japan Opportunities Fund. All deals, including regular savings contributions, received into this Fund after midday Friday 26th April 2019 will be carried forward to the next valuation point, which will be midday Tuesday 7th May 2019.