# Japan investment trust FJV sees benefits from China economic recovery

- Link: https://www.directorstalkinterviews.com/japan-investment-trust-fjv-sees-benefits-from-china-economic-recovery/4121117619
- Published: 2023-05-02T08:16:21+01:00
- 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 31 March 2023.

**Portfolio Manager Commentary**

The Trust recorded NAV returns of 2.6% over the 12 months to March 2023, underperforming
the reference index, which returned 2.8%. The discount to NAV widened over the same
period and the Trust’s share price returned -4.4%.

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

The recent failure of Silicon Valley Bank and the subsequent spread of turmoil in
the banking system from the US to Europe has created uncertainty in financial markets.
Although Japanese stocks, centred on financials, have not been immune to the related
sell-off, we do not expect any major direct impact on Japanese companies. Given 
that the rise in US interest rates is losing steam, the Chinese economy is recovering
and the manufacturing cycle is bottoming
out, we are seeing opportunities in early
tech cyclicals. Meanwhile, Japanese retailers and consumer product companies that
have a high earnings contribution from China stand to benefit from the country’s
reopening. Related to this, a further recovery in inbound demand, including the 
return of Chinese tourists, will benefit retailers and various hospitality industries.

[FJV-march-factsheet](https://www.directorstalkinterviews.com/wp-content/uploads/2023/05/FJV-march-factsheet.pdf)
[Download](https://www.directorstalkinterviews.com/wp-content/uploads/2023/05/FJV-march-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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