Alma Eikoh Japan Large Cap Equity Fund
Overview
Alma Eikoh Japan Large Cap Equity is a long only fund investing in Japanese large cap stocks.
The fund is managed internally by Alma Capital London.
Share Class
NAV
Cumulative Performance (%)
Fund Inception 12 June 2014
| Daily | Monthly | Ytd | 1Yr | 3Yr | 5Yr | Incept. | Incept.Date |
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The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Strategy & Manager
Fund Strategy
The Strategy seeks long-term capital growth by investing in Japanese large cap stocks, typically with market capitalisation in excess of US$ 1bn. The team analyses long term company fundamentals through extensive in-house bottom up research with strong risk management ethos. At the heart of the philosophy is a deep-seated knowledge and understanding of the Japanese companies that the Eikoh team invests in. Portfolio of around 30 companies which are well managed, profitable and with good prospects.
Investment Manager
Alma Capital London is an FCA-authorised fund management company, which is a subsidiary of Alma Capital Investment Management, a Luxembourg-based independent management company founded in 2006.
Key Persons
James Pulsford
Portfolio Manager
James started his career at Morgan Grenfell in 1987, moving to Japan shortly thereafter. During his 12 years in Tokyo, he went on to become the Head of the Small Cap Equity team. James returned to London in 1999 where he managed a number of Japanese large cap products for what became Deutsche Asset Management. As well as various Japanese long only mandates, James has developed the Equilibria Japan long/short strategy at this time. James now has over 35 years’ experience investing in Japan and speaks fluent Japanese. He holds a BA from Oxford University.
Tom Grew
Portfolio Manager
Tom started his career in management consulting before moving to Eikoh Research Investment Management (ERIM) in 2018, an independent asset management company led by James Pulsford established as a result of the spin out of the Japanese Equity Team from Deutsche Asset Management. At ERIM, he worked on the long-only and hedge funds management. Tom holds a BA from Cambridge University and has completed the CFA syllabus.
Statistics & Commentary
Performance
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Portfolio Characteristics
Top 10 Position Details
Investment Manager's Commentary
as of 30/01/2025Market Review and Outlook
The Topix rose by +4.62% in January, continuing the strong run of performance originating from March 2025 since when there have been no ‘down months’. This also continued the Topix’s run of outperformance of other major markets as the index soared over the first half of the month before giving up some of these gains in the second half. The market was buoyed by hopes of the new Prime Minister Takaichi calling an election in an attempt to consolidate her position and win back an overall majority for her coalition leading party the LDP. The stock market has so far reacted positively to Takaichi’s stimulatory policy ambitions and on January the 19th she duly announced the calling of a snap election. Of the several ‘Takaichi themes’ that have moved strongly, a notable one has been the weakening of the Yen which sold down to Y/$ 159 in the first half of the month, a move exacerbated by the announcement of Takaichi to suspend consumption taxes on food for two years. Bond yields simultaneously soared with the 10yr JGB yield reaching 2.35% on the day after the election and sales tax announcements. These moves then reversed course aggressively into the end of the month after expectations of both Japanese and US intervention to protect the Yen and the actual conducting of ‘rate-checks’ by both the MoF and the Federal reserve. The Yen ended the month at Y154.7 to the dollar and the JGB 10 year yield at 2.2%. Other factors impacting market performance included the continuation of the AI and Defence themes and dollar weakness and better global sentiment driving a continuation of the commodity rally. The market leading sectors were accordingly Capital Goods, Banks, Semiconductors & Semiconductor Technology and Materials with defensive and domestic sectors the laggards including Consumer Durables and Apparel, Software & Services and Consumer Staples.
The domestic economic situation continues to hold steady with December CPI ex-Fresh Food coming in at 2.4% for December nationally and 2.0% for January in Tokyo and both producer and corporate services prices are moving in a similar manner. The unemployment rate remains at 2.6% with the jobs-to-applicants ratio also steady at 1.2x and the consumer confidence index improved, registering 37.6 in January vs 36.8 in December. This is allowing the BoJ to continue the path of rate normalisation without dampening the economy. The corporate sector is also continuing to post healthy numbers with bank lending up 4.4% in December and the January PMIs for manufacturing and Services showing 51.5 and 53.4 respectively.
The market outlook is closely tied to the forthcoming election on February 8th and a couple of unique factors have made the election harder for political analysts to call. While Takaichi enjoys a high level of public approval herself, this is not true of the LDP where approval ratings hover around 30%. Takaichi is gambling that her personal popularity will extend to support for the wider slate of LDP candidates. Following the combination of Komeito with the Constitutional Democratic Party to form the Centrist Reform Alliance, the coalition faces a less fragmented opposition than expected. Recent polls however point towards an emphatic victory for the ruling coalition with a clear majority of 233 seats or more being held by the LDP alone and the coalition surpassing the 261 seats required to hold a majority on all parliamentary standing committees and effectively control parliamentary operations. There is even the possibility of the coalition winning the 310 seats required for a 2/3rds majority to override the Upper House of the Diet. Leading the LDP to election victory and recovering the Lower House majority would leave Takaichi in a very strong position within the LDP and provide a strong mandate for current administration policies. A failure by the LDP to consolidate its position would be taken very negatively by the market as it would throw into doubt the continuation of the current administration and usher in a period of political drift and uncertainty. Markets over the last few months have appreciated the balanced nature of Takaichi’s pro-growth policy aims, however the possibility that a strong electoral mandate would allow her to take a more aggressive stimulatory position has worried some investors, as the bond sell off shows. While some participants see this as a potential “Liz Truss” moment for the market and her administration, this appears an extreme view. Japan’s recently announced 2026 budget aimed for the first primary surplus for 28 years buoyed by the strong growth in tax revenues as companies benefit from the return of inflation. The temporary consumption tax cut was already an agreed coalition policy aim and the Gov’t has said that it aims to avoid issuing deficit bonds to fund this but will look at other measures such as reducing other expenditure and asset sales instead. While Takaichi will continue to aim to support growth, there is little evidence that she will abandon all fiscal caution and, if required, the BOJ remains on hand to buy bonds and stabilize the market. Assuming the election result results in a much stronger position for the LDP and coalition then we would expect the market to recover its poise and trade higher over the rest of the year.
Fund
The fund rose by +4.13% (JPY share class) in January, underperforming Topix (dividends reinvested) by -0.49%.
Both sector allocation and stock selection detracted from relative performance in January, with stock selection accounting for a slightly larger share of the total. The fund was weighed down by an underweight in Capital Goods, alongside overweights in Consumer Durables & Apparel, Technology Hardware & Equipment, Health Care Equipment & Services, and Commercial & Professional Services. These more than offset positive contributions from the overweight in Semiconductors & Semiconductor Equipment, as well as underweights in Transportation, Consumer Services, Consumer Discretionary Distribution & Retail, and Insurance. At the stock level, the fund continued to benefit from AI-related holdings, including electronics component and substrate manufacturer Ibiden and semiconductor materials supplier Resonac, the latter having announced a 30% price hike on copper-clad laminates (CCL). Prime Minister Takaichi’s decision to call a snap Lower House election also proved supportive for several portfolio names, most prominently Japan Post Bank which stands to benefit from rising mid-to-long-term JGB yields. Kawasaki Heavy Industries rose in the first half of the month reflecting the implications of heightened geopolitical tension over Greenland. In contrast, value was lost in air-conditioner manufacturer Daikin Industries, despite no company-specific news, although prices of key input material copper have risen. Healthcare-related positions also weighed on performance, notably technology conglomerate Fujifilm and ADC specialist Daiichi Sankyo. Fujifilm declined on no obvious news, while Daiichi Sankyo drifted lower reflecting concern over the potential rate of profits growth in their forthcoming mid-term plan. Additional detractors included small-and-mid-cap holdings such as medical data company JMDC and payment processing company GMO Payment Gateway, despite fundamentals remaining intact.
During January, we sold personal and home care producer Kao Corporation, as we find the overseas growth story increasingly unconvincing relative to its far more profitable domestic operation. This provided funding for other defensive names, and we initiated a position in electronic security service provider Secom. We were encouraged by management’s renewed focus on lifting profitability, particularly their mindset shift that acknowledges the need for price hikes, alongside the implied scale of share buybacks required to meet the company’s ROE target. We also added optical fibre cable and optical component manufacturer Fujikura following a company meeting. We were impressed by its leading position in components critical to data centre connectivity and reassured by proposed solutions to address fibre shortages. Fujikura’s share price had relatively underperformed in recent months, which we believe should correct over time. A reduction in Ibiden provided a natural funding source for the Fujikura purchase, keeping the fund’s overall exposure to AI-related names broadly neutral.
Facts & Documents
Facts
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 12 June 2014
Base Currency: JPY
Depositary, Administrator, Transfert Agent: BNP Paribas SA
Dealing: Each day with 1-day notice
Cut-off time: 12 pm CET
Management Company: Alma Capital Investment Management (LU)
Investment Manager: Alma Capital Investment Management (LU)
Fund Managers: James Pulsford, Tom Grew
Countries where the fund is registered:
Luxembourg, Austria, Germany, France, UK, Italy, Switzerland, Singapore, Belgium, Ireland, Spain
Sustainability-related disclosures:
Environmental, social and governance (“ESG”) criteria have been integrated in the investment decision-making process. An ESG analysis is conducted for all target companies. This is done prior to any investment, but also on an ongoing basis. In cases where the ESG analysis process flags material sustainability risks for a particular investment, the Investment Manager will not consider making the investment, and will look to divest when such material sustainability risks arise for a particular investment. No index has been designated as a reference benchmark for this sub-fund. Further information can be found in the prospectus of the sub-fund. The extent to which the above-mentioned characteristics are met will be included in the annual report of the fund, as from the first report issued after 1 January 2022.
Identifiers:
Institutional USD Hedged Capitalisation share class
ISIN: LU1013117160
Ticker: AEJIUHA LX
Launch: 12 Jun 2014
Institutional GBP Hedged Capitalisation share class
ISIN: LU1013116949
Ticker: AEJIGHA LX
Launch: 12 Jun 2014
Institutional EUR Hedged Capitalisation share class
ISIN: LU1013116782
Ticker: AEJIEHA LX
Launch: 10 Dec 2014
Institutional JPY Capitalisation share class
ISIN: LU1013116519
Ticker: AEJPIJA LX
Launch: 10 Dec 2014
Institutional GBP Unhedged Capitalisation share class
ISIN: LU1152097108
Ticker: AEKJEGC LX
Launch: 17 Feb 2015
Institutional EUR Unhedged Distribution share class
ISIN: LU1870374920
Ticker: AEJLIED LX
Launch: 8 Mar 2019
Institutional EUR Unhedged Capitalisation share class
ISIN: LU1870374508
Ticker: AEJLIEC LX
Launch: 4 Feb 2019
Retail Clean JPY Capitalisation share class
ISIN: LU1744752707
Ticker: AEJRCJC LX
Launch: 28 Apr 2022
Retail JPY Capitalisation share class
ISIN: LU1013117327
Ticker: AEJPRJA LX
Launch: 28 Apr 2022
Documents
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