Japan Smaller Companies Fund


Price (27.05.2016):

% Price Change

Fund objective and approach

Fund objective

To deliver capital growth over the long term (that is, over five years or more) by investing at least 80% of the Fund in the shares of smaller Japanese companies.

Investment policy

The Fund is primarily focused on companies that make up the bottom third of all publicly listed companies in Japan, in terms of their stockmarket value. Stocks are selected from across a wide range of industries. The fund manager’s emphasis is on stocks where he believes the share price is not fully valuing the company’s sustainable earnings over the medium to long term. When not wholly invested as above, the Fund may invest in medium and larger companies to enhance its liquidity (its ability to raise cash quickly). Derivatives may be used to meet the Fund’s investment objective and to reduce risk, minimise costs and generate additional capital and/or income. Derivatives are financial instruments whose value is linked to the expected future price movements of an underlying asset.

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 holds shares in companies that have attractive valuations relative to the earnings 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 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 attractiveness, 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.


The value of 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

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Johan Du Preez - Fund manager

Johan du Preez has managed the M&G Japan Fund and the M&G Japan Smaller Companies Fund since joining the M&G Equity team in 2015. He began his investment career in 1998 as an analyst with Prudential Portfolio Managers, South Africa (PPMSA). In the following year, he became a senior portfolio manager and shortly afterwards, a director of PPMSA. In 2004, Johan transferred to Prudential’s asset management business in Asia where he specialised in Japanese equities as an investment director. He graduated from the University of Witwatersrand, Johannesburg, South Africa with a Bachelor of Economics (Science) in mathematical statistics and actuarial science in 1992. He also holds a masters of economics degree from the University of Cape Town, South Africa. Johan is a CFA charterholder.

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John Lothian

John Lothian - Deputy Manager

John Lothian joined M&G in March 2011 as a specialist on Japanese equities. His roles have included senior analyst on the M&G North American Dividend Fund and M&G Global Leaders Fund, as well as senior research analyst covering global consumer, healthcare, and technology sectors. He was appointed deputy manager of the M&G Japan and M&G Japan Smaller Companies funds in September 2015. Prior to M&G, John co-managed a Japanese equity fund at Occam Asset Management. Before that, he covered Japanese stocks at Lazard Asset Management in London. John started his career at Lehman Brothers in Tokyo. He has an MBA from Columbia Business School, an MA in international relations from The Johns Hopkins University School of Advanced International Studies (SAIS), and a BA in Greek and Latin from The Catholic University of America. John is fluent in Japanese and is a CFA charterholder.

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Ana Cuddeford

Ana Cuddeford - Investment specialist

Ana Cuddeford is the investment specialist covering M&G’s multi-asset fund range, the M&G Global Convertibles Fund and the M&G Global Leaders Fund. She initially joined M&G in December 2013 from FTSE Group, where she had helped execute their FTSE4 Good company engagement. Prior to that, Ana spent 16 years in equity sales, the last 11 of which were at financial group Citi. She is fluent in English, Spanish and Italian and has a good command of French. Ana graduated from the University of Wales, College of Cardiff with a BSc (Hons) in European community studies.

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Rating is at a share class level

3 Star Rating

Ratings as at 30/04/2016. Copyright © 2015 Morningstar UK Limited. All Rights Reserved. Ratings should not be taken as a recommendation.

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