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Japanese Equity Fund

Seeking to uncover the best investment opportunities across the Japanese equity spectrum.

ISIN LU0230817925 WKN A0MKJ6

3YR Return Annualised
(View Total Returns)

Total Assets


1YR Return
(View Total Returns)

Manager Tenure


Information Ratio
(5 Years)

Tracking Error
(5 Years)


Inception Date 16-Dec-2005

Performance figures calculated in EUR

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30-Sep-2019 - Archibald Ciganer, Portfolio Manager,
An environment of modest global growth should continue to help corporate Japan perform well; however, we are mindful and concerned about the trade conflict between China and the U.S. Any escalation here is a key risk. While the ideal scenario is that trade war concerns subside and sanctions are lifted, we believe our quality bias should hold us in good stead if the trade situation deteriorates and jeopardises the supportive growth environment.
Archibald Ciganer
Archibald Ciganer, Portfolio Manager

Archibald Ciganer is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Japan, Inc.  As of December 2013, he has been portfolio manager for the Japan Equity Strategy, having previously covered the telecom, transportation, utility, media and consumer sectors as a research analyst in the Equity Division of T. Rowe Price.



Investment Objective

To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a widely diversified portfolio of stocks of companies in Japan.

Investment Approach

  • Macroeconomic factors have a role, but our approach is primarily bottom-up and research driven.
  • Growth opportunities are found across the capitalization spectrum and across market sectors.
  • Risk is managed at stock, sector, and cap-range levels.
  • Portfolio rebalancing is an effective risk management tool.

Portfolio Construction

  • Typically 80-110 stock portfolio
  • Minimum individual position size is 0.40%
  • Individual position sizes can range +/- 2.00% relative to the benchmark
  • Sector weightings vary from +/- 10% of the benchmark
  • Tracking error expected to range between 300 and 600 bps
  • Target reserves less than 5%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
5 YR
10 YR
Since Manager Inception
Fund % -1.26% 8.71% 12.79% 11.48% 12.39%
Indicative Benchmark % -0.03% 7.07% 9.07% 8.87% 9.44%
Excess Return % -1.23% 1.64% 3.72% 2.61% 2.95%

Inception Date 16-Dec-2005

Manager Inception Date 26-Dec-2013

Indicative Benchmark: TOPIX Index Net

Data as of  30-Sep-2019

  1 YR 3 YR
5 YR
10 YR
Fund % -1.26% 8.71% 12.79% 11.48%
Indicative Benchmark % -0.03% 7.07% 9.07% 8.87%
Excess Return % -1.23% 1.64% 3.72% 2.61%

Inception Date 16-Dec-2005

Indicative Benchmark: TOPIX Index Net

Data as of  30-Sep-2019

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 16-Oct-2019 Quarter to DateData as of 16-Oct-2019 Year to DateData as of 16-Oct-2019 1 MonthData as of 30-Sep-2019 3 MonthsData as of 30-Sep-2019
Fund % 0.70% 0.70% 20.47% 4.40% 6.31%
Indicative Benchmark % 0.67% 0.67% 16.16% 5.04% 7.50%
Excess Return % 0.03% 0.03% 4.31% -0.64% -1.19%

Inception Date 16-Dec-2005

Indicative Benchmark: TOPIX Index Net

Indicative Benchmark: TOPIX Index Net

Performance figures calculated in EUR

Past performance is not a reliable indicator of future performance.  Source for fund performance: T. Rowe Price. Fund performance is calculated using the official NAV with dividends reinvested, if any. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. It will be affected by changes in the exchange rate between the base currency of the fund and the subscription currency, if different. Sales charges (up to a maximum of 5% for the A Class), taxes and other locally applied costs have not been deducted and if applicable, they will reduce the performance figures. 

Where the base currency of the fund differs from the share class currency, exchange rate movements may affect returns.

Returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 June 2019, the "net" version of the indicative benchmark replaced the "gross" version of the indicative benchmark. The "net" version of the indicative benchmark assumes the reinvestment of dividends after the deduction of withholding taxes applicable to the country where the dividend is paid; as such, the returns of the new benchmark are more representative of the returns experienced by investors in foreign issuers. Historical benchmark performance has been restated accordingly.

30-Sep-2019 - Archibald Ciganer, Portfolio Manager,
Japanese equities generated solid returns in September, outperforming developed market peers. Sentiment was buoyed on confirmation of a trade deal that would open up Japanese markets to USD 7 billion worth of U.S. products, prompting a rotation out of defensive into cyclical stocks. Speculation that Japan will follow other major central banks and undertake further monetary policy easing provided another boost to share prices. Within the portfolio, the information technology (IT) and services sector hurt the most. SoftBank was the biggest laggard in the month. The company owns nearly a third of WeWork—a co-working start-up which withdrew its initial public offering and saw its CEO resign—which weighed on Softbank’s shares. Elsewhere, our long-standing avoidance of banks also cost us some relative performance. In contrast, stock selection in pharmaceuticals added the most value, led by our overweight position in Chugai Pharmaceutical. Shares were buoyed by positive trial developments in its drugs pipeline, relating to the safety profile of one of its cancer drugs. The raw materials and chemicals sector provided an additional fillip. Here, Kansai Paint, a manufacturer of automotive, industrial and decorative coatings, continues to benefit from its exposure to the structurally growing Indian market and demonstrates improved cost control.


Largest Holding SOFTBANK GROUP CORP 3.68% Was (30-Jun-2019) 4.49%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 29.76% View Top 10 Holdings Monthly data as of 30-Sep-2019

Largest Top Contributor^

Nippon Telegraph & Telephone
By 0.69%
% of fund 3.47%

Largest Top Detractor^

By -0.22%
% of fund 3.64%


Quarterly Data as of 30-Sep-2019

Top Purchase

Kyowa Kirin (N)
Was (30-Jun-2019) 0.00%

Top Sale

Was (30-Jun-2019) 1.86%

Quarterly Data as of 30-Sep-2019

30-Jun-2019 - Archibald Ciganer, Portfolio Manager,

While there were no significant portfolio changes in the quarter, we reduced slightly our overweight holdings in information technology and services and scaled back exposure to financials excluding banks. On a stock level, the biggest sale was Japan Tobacco.

We continued to book profits in names where we felt our investment thesis had played out and/or where the share price had risen and where we saw limited scope for further gains. Instead, we identified investment opportunities where there was the potential for margins to improve, robust earnings growth, and an attractive dividend yield.

In addition, we are also invested in companies that we believe stand to benefit from structural changes in Japan's economy, such as the shift to electronic payments, changing consumer preferences, the aging population, and the tightening labor market. Most of the changes to the portfolio continued to be the result of stock-specific investment themes, rather than a reflection of a shift in our sector view.

Trimming IT and Services Exposure

We reduced exposure to GMO Payment Gateway, the largest payment processor in Japan with 60% market share. It is a beneficiary of the secular and long-term demonetization in Japan. Growth has been robust, and GMO retains a dominant market share in a growing industry. However, we have trimmed our position following the news that Softbank had bought a stake in Wirecard, a German payment processor. Softbank is the number two player in the industry, and the news is likely to mean that Softbank is going to be more aggressive in the space. Given this development, we thought it prudent to reduce the position.

We also cut back our holding in Nippon Telegraph and Telephone. The company had its credit rating cut by Moody's, which cited lower mobile rate plans that are likely to cause margins to fall. It may seek to mitigate this decline by implementing cost cuts.

Scaling Back Financials Excluding Banks

Zenkoku Hosho (which translates into "national guarantee") is an independent home mortgage guarantor company in Japan. The company listed its shares in December 2012 and is the only pure-play mortgage guarantor listed in Japan. It has disappointed on taking market share, which was a key thesis for the stock, and the uptake from banks also has also been lacklustre, leading us to trim the position.

Exiting Japan Tobacco

We sold our position in the third-largest listed tobacco company, Japan Tobacco, which has a 17% global share excluding China. Market share in Japan is 61%, but we have grown increasingly concerned about the threat of heat-not-burn (HNB) products to their market share and, in particular, the IQOS product from rival Philip Morris. This, and the increasing scrutiny of ethical and responsible investors, is likely to limit the potential for multiple expansion.

Adding to Electric Appliances and Precision Instruments Sector

We established a new position in Hamamatsu Photonics, a global leader in products that work with emitting or detecting particles of light. Its major end markets are medical radiology and blood testing equipment, industrials related to semiconductor and factory automation, and light detection and ranging (LiDAR) components in self-driving cars. We believe that earnings will grow as the addressable market increases while management delivers on strong execution.

Exposure to Murata Manufacturing was also increased. The company is Japan's largest passive component maker with a 40% market share. It is a secular grower, with the company benefiting from increasing automation in cars, the development of smartphones for 5G, and high-quality management. Murata is a bet on contents gain in automobile, driven by increased electrification, connectivity, fuel-efficiency, and communication devices as a result of higher connectivity, better performance, and energy-efficiency. There has been a strong sell-off in the stock on concerns on global growth, and with consensus expectations falling significantly, we believe the risk/reward is now attractive at these levels.

Elsewhere in the sector, we topped up Keyence, which produces vision and laser sensors used in factory automation. It is a high returns business in an industry (factory automation) that is secularly growing; its domestic business share is very strong, as has been growth outside of Japan. The stock has sold off on concerns about global growth and the outlook for the semiconductor sector; this sell-off provided an opportunity for us to add to a very good business, which often trades at rich multiples.


Largest Sector It & Services & Others 32.30% Was (31-Aug-2019) 33.52%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: TOPIX Index

Top Contributor^

Net Contribution 0.68%
Selection 0.67%

Top Detractor^

Information Technology
Net Contribution -0.88%


Quarterly Data as of 30-Sep-2019

Largest Overweight

It & Services & Others
Fund 32.30%
Indicative Benchmark 16.01%

Largest Underweight

Fund 0.00%
Indicative Benchmark 5.87%

Monthly Data as of 30-Sep-2019

30-Sep-2019 - Archibald Ciganer, Portfolio Manager,
We have moved underweight the retail trade sector in recent months. For example, we sold our holding in online retailer Zozo. The company was subject to a take-over bid, which gave the shares a boost. The company is likely to become less innovative after the deal and we believe minority shareholders will eventually be taken out. In contrast, we increased our exposure to the raw materials and chemicals sector, through adding a position in a leading pharmaceutical company. The firm has benefitted from the trend of its product mix shifting towards a greater contribution from inhouse offerings, and is a frontrunner in rare antibody platform technologies.

Team (As of 31-Aug-2019)

Archibald Ciganer

Archibald Ciganer is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Japan, Inc.  As of December 2013, he has been portfolio manager for the Japan Equity Strategy, having previously covered the telecom, transportation, utility, media and consumer sectors as a research analyst in the Equity Division of T. Rowe Price.

Mr. Ciganer has 20 years of investment experience and joined T. Rowe Price in 2007. He began his career as a credit analyst with BNP Paribas in Japan. Subsequently, he served as an associate in the firm's Investment Banking Department and most recently as a vice president in Mergers and Acquisitions, where he handled a number of cross-border transactions for blue chip Japanese and foreign corporates.

Mr. Ciganer graduated from Institut d'Etudes Politiques de Paris (sciences po.) in finance and accounting. Mr. Ciganer has earned the Chartered Financial Analyst designation. Mr. Ciganer is fluent in French, Japanese and English.

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
  • Years investment

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A €15,000 €100 €100 5.00% 160 basis points 1.77%
Class I €2,500,000 €100,000 €0 0.00% 75 basis points 0.85%
Class Q €15,000 €100 €100 0.00% 75 basis points 0.92%

Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.

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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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