Japan Smaller Companies Fund

ISIN
GB0030938707

Price (06.07.2015):
349.56

% Price Change
-1.19

Fund objective and approach

Fund objective

The Fund invests wholly or predominantly in securities of smaller Japanese companies, the universe for which is the bottom third in terms of total market capitalisation of all publicly listed equity in Japan. When not wholly invested as above, the Fund may also invest in medium sized and larger companies in order to enhance its liquidity. Its sole objective is long term capital growth.

Investment approach

The M&G Japan Smaller Companies Fund invests in listed smaller Japanese companies to achieve sound capital growth over the long term. The fund manager applies disciplined and rigorous fundamental analysis during the selection process to ensure a high level of conviction around the valuation for each of the companies held in the fund.The fund manager adopts a value approach to investment and the fund owns shares in companies that have cheap valuations relative to the trend returns they are likely to generate over the medium to long term. These companies are quite often out of favour with the market for one reason or another. The fund’s investment approach therefore tends to be contrarian in nature.

The fund manager sees value investing as a price-sensitive process that takes advantage of the mis-pricing of a company’s shares by the market. Whilst recognising that markets are generally efficient, the fund manager believes that market mis-pricings can and often do occur because human characteristics (such as fear and greed) may prevent investors from always assessing investments rationally. As a result, market prices do not always reflect fundamental values since they may over-shoot and under-shoot. For example, shares in companies become mis-priced when investors are willing to pay a high price for the ‘comfort’ of strong near-term earnings momentum and to be associated with success, whilst they will sell ‘unfashionable’ securities regardless of inherent value characteristics, such as healthy balance sheets and the likely level of longer term earnings. Such behavioural biases are evident in Japan’s equity markets today and can be systemically exploited. The fund manager aims to take advantage of these biases by adopting a disciplined, long-term investment approach.

The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.

Performance

The value of stockmarket investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate. Past performance is not a guide to future performance. 

Source: Price: State Street. Performance: Morningstar. Performance figures are on a price to price basis with net income reinvested. Performance figures may not reflect all relevant charges.

Please note that the Morningstar Category performance data in this tool where shown, is from the default Morningstar database, which contains all the share classes for each fund available across Europe, Asia and Africa. This can differ from the comparative sector data in M&G factsheets which is from the same database, but showing only the most appropriate share class to represent each fund, and for just those funds available in Europe. Neither Morningstar nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web site, including, but not limited to Information originated by Morningstar, licensed by Morningstar from Information Providers, or gathered by Morningstar from publicly available sources. There may be delays, omissions, or inaccuracies in the Information.

 

Fund Team

Max Godwin - Fund manager

Max Godwin joined the Japan equity team in 2007 and co-managed the M&G Japan Smaller Companies Fund until April 2010, at which time he assumed sole responsibility of the fund. Max previously worked for Pi Investments (HK), as a senior analyst and co-portfolio manager. Prior to that, Max was a founding partner and analyst for OAL Advisors, advisors to the Rockhampton Fund, Tokyo. Preceding that Max was a small/mid cap equity analyst with Cazenove & Co (Japan), Tokyo. Max is fluent in written and spoken Japanese, and has over 17 years of investment experience covering Japanese equities. Max graduated from the London School of Economics, and holds a BSc in economics. He is also a UK qualified chartered accountant.

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Dean Cashman - Deputy Manager

Dean Cashman joined the Japan equity team in 2004 and became responsible for the M&G Japan Fund in June 2006. Dean began his career as an investment professional with BT Fund Managers (Sydney), where he was promoted to Head of Japanese equities. Dean has over 27 years of investment experience, and has focused his career almost exclusively on the Japanese equity market. Dean graduated from the University of Queensland, Australia, and holds a Bachelor of Economics.

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Michael Woolley - Investment specialist

Michael Woolley joined Eastspring Investments in August 2007 with over 17 years of industry experience. He had previously worked at Schroder Investment Management (Singapore) and held roles in institutional sales, relationship management and product management in Asian equities. Prior to this, Michael was at ING Australia and held a role in institutional relationship management within the corporate superannuation business. Michael graduated from the University of New South Wales, Australia, and holds a BSc in economics.

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Ratings

Rating is at a share class level

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Morningstar OBSR Analyst Rating™ Copyright © Morningstar. All Rights Reserved. Ratings as at 30/04/2015 and should not be taken as a recommendation.

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