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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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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SICAV

Japanese Equity Fund

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

ISIN LU0230817339 Bloomberg TRPJAEA:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(EUR)

8.66%
€2.0b

1YR Return
(View Total Returns)

Manager Tenure

16.32%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.48
6.23%

Inception Date 11-Apr-2006

Performance figures calculated in EUR

30-Jun-2021 - Archibald Ciganer, Portfolio Manager,
We believe the anticipated global economic recovery will continue to build and broaden through 2021 and beyond and that we will slowly return to some semblance of “normality.” Given Japan is one of the most cyclical and open markets—highly levered to the health of the global economy—we believe it will be a major beneficiary of the prospective global recovery. The rapid economic recovery evident in China, Japan’s major trading partner, represents a significant tailwind.
Archibald Ciganer
Archibald Ciganer, Portfolio Manager

Archibald Ciganer is the portfolio manager of the Japan Equity Strategy in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Japan, Inc.

 

Strategy

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.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

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 A)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 16.32% 8.66% 11.22% 11.92% 12.05%
Indicative Benchmark % 16.85% 5.40% 8.25% 9.42% 8.93%
Excess Return % -0.53% 3.26% 2.97% 2.50% 3.12%

Inception Date 11-Apr-2006

Manager Inception Date 26-Dec-2013

Indicative Benchmark: TOPIX Index Net

Data as of 30-Jun-2021

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 16.32% 8.66% 11.22% 11.92%
Indicative Benchmark % 16.85% 5.40% 8.25% 9.42%
Excess Return % -0.53% 3.26% 2.97% 2.50%

Inception Date 11-Apr-2006

Indicative Benchmark: TOPIX Index Net

Data as of 30-Jun-2021

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 29-Jul-2021 Quarter to DateData as of 29-Jul-2021 Year to DateData as of 29-Jul-2021 1 MonthData as of 30-Jun-2021 3 MonthsData as of 30-Jun-2021
Fund % -1.14% -1.14% -4.24% 3.86% -3.14%
Indicative Benchmark % 0.20% 0.20% 4.54% 2.81% -1.69%
Excess Return % -1.34% -1.34% -8.78% 1.05% -1.45%

Inception Date 11-Apr-2006

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.

Index 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-Jun-2021 - Archibald Ciganer, Portfolio Manager,
Japanese stocks generated a positive return in June but lagged their developed market peers. Concerns about a resurgence in domestic coronavirus cases dampened sentiment, despite the government easing some restrictions. Within the portfolio, in the IT and services sector, Freee was the top contributor, while Money Forward also gained. The cloud accounting software-as-a-service providers benefited from improving software investment sentiment. Pharmaceutical company Eisai also added. Shares rallied as its aducanumab drug for the treatment of Alzheimer’s (marketed as Aduhelm) gained approval by the U.S. Food & Drug Administration. Conversely, Kubota was the largest detractor within the machinery sector and the portfolio overall. Shares in the producer of small tractors and rice field equipment were subject to profit taking after reaching a record high on very strong quarterly results that showed faster-than-expected sales growth. Elsewhere in the sector, Hoshizaki was another laggard. The commercial kitchen manufacturer faces a headwind from a slower-than-anticipated recovery in demand, partly due to the resurgence of coronavirus cases in Japan and India. We retain our conviction in the stock as we believe it will be a direct beneficiary when the coronavirus situation eases and demand conditions normalise.

Holdings

Total
Holdings
63
Largest Holding Keyence 4.67% Was (31-Mar-2021) 4.04%
Other View Full Holdings Quarterly data as of  30-Jun-2021
Top 10 Holdings 36.98% View Top 10 Holdings Monthly data as of  30-Jun-2021

Largest Top Contributor^

Keyence
By 1.73%
% of fund 4.66%

Largest Top Detractor^

Hoshizaki
By -0.11%
% of fund 4.53%

^Absolute

Quarterly Data as of 30-Jun-2021

Top Purchase

Eisai (N)
2.15%
Was (31-Mar-2021) 0%

Top Sale

SOFTBANK GROUP CORP
4.02%
Was (31-Mar-2021) 7.23%

Quarterly Data as of 30-Jun-2021

31-Mar-2021 - Archibald Ciganer, Portfolio Manager,

We made few changes to the portfolio after the relatively large adjustment in the second quarter of 2020 when we rotated into quality cyclical companies that were very cheap on expectations that they would outperform as earnings expectations improved from depressed levels. In the most recent quarter, we continued to find compelling investment opportunities within the IT space and participated in an IPO. Conversely, we trimmed holdings where we felt valuations had become challenging following strong share price performance.

As of the end of the first quarter, the portfolio's most significant sector overweight positions remained in IT and services and machinery. The main underweights included banks, commercial and wholesale trade, and transportation and logistics.

IT and Services

The IT and services and other sector is by far the largest absolute and relative position in the portfolio and in the first quarter, we continued to find compelling investment opportunities within this diverse space.

  • We participated in the IPO of Coconala. The company operates a skills-matching marketplace where users can contract for services provided by skilled individuals such as designers, copywriters, and programmers. Coconala's marketplace is growing rapidly, not just because of the pandemic but because more and more Japanese are interested in gig-style work to supplement their income. The digitalization of the service economy is likely to follow the shift to ecommerce for the trading of physical goods.
  • Hikari Tsushin distributes office equipment to small businesses and resells mobile phone contracts to both individuals and small businesses. We bought the stock after it sold off due to a temporary surge in power prices, which will squeeze resale profits. The price surge will impact Hikari's retail electricity business, but we believe this is temporary and industry consolidation is improving competitive dynamics.

Electric Appliances and Precision Instruments

The portfolio entered the review period with an underweight position in the electric appliances and precision instruments sector and over the quarter we modestly reduced this further on valuation grounds.

  • SMS is Japan's leader in recruitment services and classified media for nurses and workers in the elderly care market. SMS also markets "Kaipoke", a management support software package for in-home nursing-care operators. In our view this is a quality growth company; it has performed very well and we sold some shares to reflect the risk-reward dynamic. SMS remains a core position and a long-term holding given the favorable long-term structural opportunity in an attractive industry.

Retail Trade

As the quarter began, the portfolio was broadly neutral with the retail trade sector. As a result of our activity over the period, we ended the quarter modestly underweight.

  • Fast Retailing is the operator of Uniqlo apparel. We sold shares of the company after very strong share performance due to strong growth and execution. We still like the name for its growth and potential, especially in China and the U.S., and it will remain a core portfolio holding.

Sectors

Total
Sectors
12
Largest Sector It & Services & Others 37.52% Was (31-May-2021) 36.24%
Other View complete Sector Diversification

Monthly Data as of 30-Jun-2021

Indicative Benchmark: TOPIX Index

Top Contributor^

Health Care
Net Contribution 0.80%
Sector
0.08%
Selection 0.72%

Top Detractor^

Industrials & Business Services
Net Contribution -1.23%
Sector
-0.02%
Selection
-1.21%

^Relative

Quarterly Data as of 30-Jun-2021

Largest Overweight

It & Services & Others
By20.62%
Fund 37.52%
Indicative Benchmark 16.91%

Largest Underweight

Banks
By-4.94%
Fund 0.00%
Indicative Benchmark 4.94%

Monthly Data as of 30-Jun-2021

30-Jun-2021 - Archibald Ciganer, Portfolio Manager,
The portfolio is overweight the pharmaceutical sector. We added to our holding in a pharmaceutical company whose shares were subject to profit taking after a drug in its pipeline was granted regulatory approval. The machinery remains one of the portfolio’s largest overweight positions. We trimmed our holding in a producer of small tractors and rice field equipment given the stock's high valuation and our belief that there is limited scope for fundamentals to improve further.

Team (As of 27-Jul-2021)

Archibald Ciganer

Archibald Ciganer is the portfolio manager of the Japan Equity Strategy in the International Equity Division. He is a vice president of T. Rowe Price Group Inc. and T. Rowe Price Japan, Inc. 

Archibald’s investment experience began in 1999 and he has been with T. Rowe Price since 2007, beginning in the International Equity group. Archibald 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.

Archibald earned a B.A. in finance and accounting from Institut d'Etudes Politiques de Paris (sciences po.). Archibald has also earned the Chartered Financial Analyst® designation.

  • Fund manager
    since
    2013
  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    21
Laurence Taylor

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

Laurence’s investment experience began in 1999, and he has been with T. Rowe Price since 2008, beginning in the Investment Specialist Group. Prior to this, Laurence was employed by AXA Rosenberg as a quantitative portfolio manager, with responsibility for global and European equity portfolios, and began his career at AonHewitt Associates in the UK investment practice. At AonHewitt, Laurence 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.

Laurence earned a B.A., with honors, from Greenwich University. He also has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    21

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A €1,000 €100 €100 5.00% 160 basis points 1.71%
Class I €2,500,000 €100,000 €0 0.00% 75 basis points 0.81%
Class Q €1,000 €100 €100 0.00% 75 basis points 0.86%

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