# Japan equity investments: Fidelity Japan Trust eyes growth stocks return

- Link: https://www.directorstalkinterviews.com/japan-equity-investments-fidelity-japan-trust-eyes-growth-stocks-return/4121112026
- Published: 2023-03-24T16:39:27+00:00
- Author: Amilia Stone

**[Fidelity Japan Trust PLC](https://www.directorstalkinterviews.com/company/fidelity-japan-trust/fjv.l)**(
[LON:FJV](https://www.directorstalkinterviews.com/company/fidelity-japan-trust/fjv.l))
published its monthly factsheet for the period ended 28 February 2023 

**Portfolio manager commentary**

The Trust recorded NAV returns of 0.5% over the 12 months to February 2023, underperforming
the reference index, which returned 1.7%. The discount to NAV widened over the same
period and the Trust’s share price returned -4.7%. 

Style headwinds worked against performance at times, as moves toward monetary tightening
in the US and Europe spurred a rotation into value and weighed on growth stocks.
In this environment, holdings in software and internet services companies were among
the most significant detractors. The underweight exposure to certain value-oriented
segments of the market, most notably banks, weighed on relative returns. On a positive
note, domestic reopening names and under covered small caps were among the strongest
performers.

Inflation surprises have driven market expectations for the pace of interest rate
hikes by the US Fed. As economic activity weakens, however, bond yields are likely
to be restrained by lower levels of growth. If the view that long-term rates have
peaked gains traction, this would help to put a floor under equity markets. It would
also support a bottoming out in growth stocks, and we would expect names that performed
poorly in 2022 to come back quite strongly. Against this backdrop, there is the 
potential for beaten-up technology stocks to start performing again, especially 
as earnings disappointments are coming out as we approach the trough of the cycle.

[FJV-Feb-Factsheet](https://www.directorstalkinterviews.com/wp-content/uploads/2023/03/FJV-Feb-Factsheet.pdf)
[Download](https://www.directorstalkinterviews.com/wp-content/uploads/2023/03/FJV-Feb-Factsheet.pdf)

**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. 

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