Fidelity Japan Trust PLC (LON:FJV) published its monthly factsheet for the period ended September 2024.
Portfolio Manager Commentary
Japanese equities fell for a third consecutive month in September amid shifting expectations around monetary policy and accompanying currency movements. Weakness in US technology stocks and domestic political uncertainty also weighed on the market. After raising short-term rates to 0.25% in July, the Bank of Japan stood put in September. Meanwhile, Japan’s Prime Minister Fumio Kishida announced that he would step down as leader of the ruling Liberal Democratic Party. Former defence minister Shigeru Ishiba unexpectedly won the leadership election and, despite initial speculation to the contrary, appeared set to maintain the key policies of the Kishida administration.
While concerns over yen appreciation have eased since the September round of central bank meetings, uncertainty over the direction of the US economy and the outcome of November’s Presidential election remain key sources of market volatility. At the same time, a sustainable reacceleration in China’s economy could throw up new investment opportunities.
Looking forward, we are starting to see a bottoming out of mid/small-cap performance as rates come down, which should broaden and create headwinds for some of the yen sensitive mega caps that have led the market and will thus benefit the Trust’s more domestically oriented mid-cap portfolio.
Over the 12 months to 30 September 2024, the Trust recorded NAV and share price returns of 4.8% and 1.2% respectively, compared to 10.7% for the index.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
