SICAV
Japanese Equity Fund
Seeking to uncover the best investment opportunities across the Japanese equity spectrum.
3YR Return Annualised
(View Total Returns)
Total Assets
(EUR)
1YR Return
(View Total Returns)
Manager Tenure
Information Ratio
(5 Years)
Tracking Error
(5 Years)
Inception Date 11-Apr-2006
Performance figures calculated in EUR
Strategy
In November, Shinzo Abe became Japan's longest-serving prime minister. Seven years ago, Abe assumed leadership of a country burdened by stagnant economic growth, unfavorable population dynamics, and a mountain of debt. He adopted a "three arrows" approach (Abenomics) to counter these trends, centered around loose monetary policy, fiscal stimulus, and structural reform.
�
On the first arrow, Japan has certainly managed to leave behind a deeply entrenched deflationary cycle, although inflation is falling short of the BoJ's 2% target. This has been achieved in part by monetary expansion through massive bond and equity purchases - quantitative easing - and the BoJ has said that it will not hesitate to add further stimulus if needed.
�
Regarding fiscal stimulus, the second arrow, Japan first hiked consumption taxes five years ago - to 8% from 5% - and followed this with a further increase to 10% in October 2019. In the first instance, the post-increase slump in spending dragged the Japanese economy into recession. However, there are few signs of consumers behaving the same way as they did when the tax previously went up, and the government has excluded items such as fresh food to smooth the impact, as well as introducing alleviation measures for automobiles and housing.
�
The third arrow of structural reform has contributed to an increase in female participation in the workforce and encouraged businesses to allocate capital more effectively. The productivity of capital has risen, albeit from a low base. Against this backdrop of change, an increasing number of Japanese companies are defying skeptics by transforming business practices and governance standards. We believe this can help corporate profit growth and generate improving shareholder returns. The volume of shareholder buybacks is increasing while merger and acquisition activity also shows promise.
�
The condition of the global economy remains a key factor supporting the Japanese equity market. An environment of modest global growth should continue to help corporate Japan perform well. Japan is an open and cyclical economy; therefore, central bank easing and the resolution in the U.S.-China trade war will be supportive for Japan.
�
Despite the strong performance in 2019, we believe the outlook for Japan in 2020 remains robust. The 5G technology cycle and the upcoming Olympics are providing strong support for sentiment and fundamentals for earnings, the economy, and the equity market.
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 A)
Annualised Performance
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
Since Manager Inception Annualised |
|
|---|---|---|---|---|---|
| Fund % | 26.62% | 9.55% | 13.55% | 11.22% | 12.06% |
| Indicative Benchmark % | 20.98% | 6.58% | 9.79% | 9.64% | 9.89% |
| Excess Return % | 5.64% | 2.97% | 3.76% | 1.58% | 2.17% |
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
|
|---|---|---|---|---|
| Fund % | 26.62% | 9.55% | 13.55% | 11.22% |
| Indicative Benchmark % | 20.98% | 6.58% | 9.79% | 9.64% |
| Excess Return % | 5.64% | 2.97% | 3.76% | 1.58% |
Recent Performance
| Month to Date | Quarter to Date | Year to Date | 1 MonthData as of 31-Dec-2019 | 3 MonthsData as of 31-Dec-2019 | |
|---|---|---|---|---|---|
| Fund % | N/A | N/A | N/A | -0.78% | 6.59% |
| Indicative Benchmark % | N/A | N/A | N/A | 0.39% | 4.85% |
| Excess Return % | N/A | N/A | N/A | -1.17% | 1.74% |
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.
Holdings
Total
Holdings
75
Largest Top Contributor^
Miura
By 0.08%Largest Top Detractor^
Suzuki Motor
By -0.24%Top Purchase
Freee KK (N)
0.77%Top Sale
Mitsui Fudosan Logistics Park (E)
0.00%
Sectors
Total
Sectors
13
Top Contributor^
Industrials & Business Services
Net Contribution 1.73%Top Detractor^
Communication Services
Net Contribution -0.25%Largest Overweight
It & Services & Others
Largest Underweight
Banks
Team (As of 06-Jan-2020)
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 2000, and he has been with T. Rowe Price since 2007, beginning in the International Equity groupDivision. Archibald began his career as a credit analyst with BNP Paribas in Japan. Subsequently, he served as an associate in the firm'sBNP’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 (sSciences pPo.). Archibald He also has also earned the Chartered Financial Analyst® designation.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
- Fund manager2013
since - Years at12
T. Rowe Price - Years investment20
experience
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 at11
T. Rowe Price - Years investment20
experience
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.
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.