First, we select the top trending category from more than 200 categories listed on MutualFunds.com based on the percentage increase in monthly viewership. From the top trending category, we select the top three funds with the highest one-year trailing total returns. To ensure the quality and staying power of funds, we only look at those mutual funds with a minimum of $250 million in assets and a track record of at least three years. We also remove those mutual funds that are closed to new investors and are not available for investment outside registered accounts such as retirement or 529 accounts.
In this week’s edition, we analyze the top three Japan Equity Funds. These funds invest in stocks and companies that are located in Japan or that derive the majority of their income from Japan. They are generally diverse when it comes to stock market selection with assets in multiple economic sectors. They also have no guideline on market capitalization with stocks ranging from small-cap up to large-cap being held in the fund’s portfolio.
Our breakdown of each fund includes key aspects such as one-year performance, fund expenses, investment style, and management teams to give you an overview of how these funds hold up against their peers.
Be sure to check out the Japan Equity Funds page to find out more about the other funds in this category as well.
Trending Funds
1. T. Rowe Price Japan Fund (PRJPX)
The top spot on our list this week is the Japan Fund (PRJPX) from T. Rowe Price. It has an outstanding one-year trailing total return of 23.31%. It comes with a relatively low expense ratio of 0.97% as well.
The investment strategy of the fund is to invest at least 80% of its assets in companies that are located in or have primary operations in Japan. Management selects equities that reflect a growth-oriented portfolio, favoring companies that have above-average, long-term earnings growth. It is benchmarked to the TOPIX (Tokyo Stock Price) Index.
Archibald Ciganer, CFA, is the portfolio manager of the fund and brings 13 years of experience in the Japanese equities market. He has been managing the fund since December 2013.
The top five holdings in the fund’s portfolio are SOFTBANK GROUP CORP (6.39%), Suzuki Motor (4.95%), Hoshizaki (4.71%), Keyence (4.43%), and Daikin Industries (3.68%). As of the end of June, the fund held 58 assets in its portfolio.
Learn more about different Portfolio Management concepts here.
The runner-up mutual fund this week is Matthews Asia’s Japan Fund (MJFOX). It generated a one-year trailing total return of 18.04%. It also has a low 0.93% expense ratio, ensuring that investors receive the most profits from their investment.
The fund’s investment strategy is to invest at least 80% of its assets in Japanese equities or companies that derive at least 50% of their income from goods or services sold in Japan. Management selects growth-oriented stocks and may choose investments from any market sector or capitalization. It uses the MSCI Japan Index as its benchmark portfolio.
The lead portfolio manager of the fund is listed as Taizo Ishida who has been managing the fund since September 2006. He is supported by Shuntaro Takeuchi, a portfolio manager at Matthews, who joined the team in January 2019.
The top five holdings in the fund’s portfolio include Nintendo Co (4.6%), Sony Corp (4.5%), Daikin Industries (3.9%), Shin-Etsu Chemical Co (3.6%), and Nihon M&A Center (3.4%). The top five sector weights are information technology (27%), health care (19.1%), consumer discretionary (14.9%), industrials (14.1%), and communication services (9.6%).
Find out about the funds suitable for your portfolio by using our free Screener.
Last on our top three list this week is the Japan Fund (FJPNX) offered through Fidelity. The fund provided a one-year trailing total return of 14.36%. The 1.01% expense ratio is the highest on our list but still comes in average compared to its peers with similar fund types.
The fund’s investment strategy is to invest at least 80% of its assets in Japanese stocks or companies that derive the majority of their profits from Japanese operations. Management selects stocks regardless of market sector or capitalization and uses fundamental analysis to identify strong investments. It uses the TOPIX (Tokyo Stock Price) Index as its benchmark portfolio.
The portfolio manager of the fund is Kirk Neureiter, who has been managing the fund since March 2014.
The top five holdings in the fund’s portfolio are currently listed as SOFTBANK GROUP CORP, Hoya Corp, Sony Corp, Takeda Pharmaceutical Co, and Orix Corp. The sector weights are listed as industrials (18.99%), information technology (15.05%), health care (13.15%), consumer discretionary (13.01%), and consumer staples (9.00%).
Want to know more about portfolio rebalancing? Click here.
The Bottom Line
Our expert analysis of the top three funds will give you insight so you know which Japan Equity Fund best fits your portfolio needs.
Make sure to visit our News section to catch up with the latest news about mutual fund performance.
Note: Data as of September 10, 2020