• Investment objective: seek long-term capital growth by investing generally in Japanese large cap stocks (with market capitalisation in excess of US$ 1bn)
  • The fund is classified under article 8 of the European Regulation on sustainability-related disclosures in the financial services sector (SFDR)
  • The strategy has been awarded a rating of AAA from MSCI ESG Rating, which is the top 1% of its peer group and is rated by Morningstar/Sustainalytics with the score of 4 globes
  • The strategy has 5 Stars from Morningstar

Share Class


Cumulative Performance (%)

Fund Inception 12 June 2014

Daily Monthly Ytd 1Yr 3Yr 5Yr Incept. Incept.Date

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

Funds Strategy

  • Investment objective: seek long-term capital growth by investing generally in Japanese large cap stocks (with market capitalisation in excess of US$ 1bn)
  • Investment process: analyse long term company fundamentals through extensive in-house bottom up research with a strong risk management ethos
  • Portfolio of around 30 companies which are well managed, profitable and with good prospects. Portfolio managers believe that Cash Flow Return on Investment and value creation are key

Investment Manager

Alma Capital Investment Management “ACIM”

Key Persons

James Pulsford – Fund 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 30 years’ experience investing in Japan and speaks fluent Japanese. He holds a BA from Oxford University.

Statistics & Commentary


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 31/05/2021

Market Review and Outlook

After the rally in the second half of March, the Topix fell reasonably sharply through the first week of April on renewed concerns of rising US rates, the direct and indirect consequences of the ongoing war in Ukraine and large scale lockdowns in China. These themes continued to dominate headlines throughout the month as global indices trended weaker. Global inflation data, the driving force behind the rate hiking cycle and the squeeze on household wealth that many are concerned will lead to economic slowdown, continued to show high numbers with headline US CPI at 8.5%, the highest level since 1981. With expectations for Fed rate hikes strengthening, US 10 year treasury yields continued their move higher, ending the month at 2.9% from 2.3% at the beginning of the month. Similar trends were seen across developed European economies with German 10 year yields climbing to 0.95%, levels not seen for over 5 years. In Japan though the direction of inflation is increasing in tandem with the rest of the world, its magnitude remains much smaller with March CPI at just 1.2%. The BOJ sees core CPI at 1.9% for 2022 and 1.1% for 2023, still within the official 2% inflation target and as a result Kuroda and the BOJ have continued to maintain a very dovish stance, reiterating the 10 year yield target at ‘around 0%’ and the balance rate at -0.1%. The market has tried to test these limits with the 10yr yield reaching 0.25% on the 20th, prompting ‘fixed rate operations’ by the BOJ, aggressively buying bonds and maintaining their desire to ‘prevent Japan’s long term interest rates rising in line with overseas bond yield increases’. In short the policy of the BOJ remains unchanged and its continued loose and dovish policy in combination with rate hikes elsewhere led to the continued dramatic sell off in the Yen which stood at Y131 against the dollar on April 28th, the highest level in 20 years. Certain exporters will naturally benefit from the weak yen but there are increasing concerns over the impact on consumers and society at large, especially in light of the fact that over 90% of primary energy supply is imported. Commodity prices remained firm through April with Brent crude ending the month at $109 and copper dropping slightly from $10,400 to $9,800/MT and the stock market continued to reflect this with utilities and energy among the few positively performing market sectors. Other leading market sectors included defensive areas like Pharmaceuticals & Biotechnology, Telecommunications and Food, Beverage & Tobacco as well as financial sectors such as Banks and Insurance which stand to benefit from rising rates. The worst performing sectors were Semiconductors & Semiconductor Technology, Consumer Services, Consumer Durables & Apparel, Commercial & Professional Services and Technology Hardware & Equipment. The Topix Value index returned to its outperformance of the Topix Growth Index and has now outperformed it by 16% ytd.

Economic news in Japan remained broadly positive in April though there are some signs that sentiment and economic activity is beginning to weaken rather than strengthen. The Current Conditions index in the March Tankan survey for large manufacturers while positive at +14 was slightly lower than the +18 recorded in December 2021 and for non-manufacturers the result was +9, down from +10. Similarly the large company capex plan survey was positive at +2.2% but below the 9.3% estimated in December 2021. In terms of PMI, both manufacturing and services PMIs in April remained positive at 53.5 and 50.5 respectively and the economy watchers survey for current conditions showed a meaningful uptick from 37 to 49 in March, reflecting recovery from the latest surge of COVID cases in Japan. Whilst the labour market remains incredibly tight, it is clear consumer sentiment is beginning to falter and the Consumer Sentiment Index dropped again in April to 32, the 4th MoM drop in as many months this year and this likely reflects the emergence of noticeable inflationary pressures on household budgets, something not experienced for several years by the Japanese consumer. Excluding mobile fees, CPI in March was 2.2% and average electricity prices jumped 21.6% and further evidence of such inflationary pressures can be seen in examples such as Lawson’s 10% price hike on ‘Karaage-Kun’, a popular snack costing now Y238, a price that hadn’t changed since 1986.

The cocktail of high inflation, rising rates, the Russian invasion of Ukraine and more recently Chinese lockdowns covering around a quarter of the population and 40% of GDP continue to dominate market sentiment and economic forecasting. What is clear is that the impact on the consumer is already being felt but what is unclear is the extent to which these disruptions and high prices depress economic activity and the COVID recovery seen thus far. Stock market activity over the last two months would suggest Europe in particular is likely to face severe headwinds and central banks tones are becoming noticeably bearish with the Bank of England now predicting the UK to slide into recession in the second half of this year. In the US where energy price growth has not been as extreme, the Fed revised down its 4% GDP growth forecast from December to 2.8% in March. It remains hard to see what central banks can do in the face of such pressures with loose monetary policy no longer an option but tighter policy likely to add further economic stress. Equally there still remains the possibility that supply chains ‘un-jamming’ and a small drop off in demand could have meaningful impacts on costs which have been the key driver of this bout of inflation. In such a scenario it would seem the economic outlook would become more favourable and these fears could be swiftly allayed. Through April we have continued our modest shift towards becoming more defensive led by the outlook for the stocks we cover. Having seen the first of the full year results and company forecasts for next year it seems to us that in certain areas there is a clear risk of a cyclical fall in demand. That being said we still see excellent opportunities for the companies in our portfolio and for example retain our cyclical exposure through technology and the overweight in Semiconductors and Semiconductor Equipment. We have limited exposure to other cyclical and industrial areas and the other overweights for the fund are in Commercial & Professional Services, Software & Services, Energy and Food & Staples Retailing. We are underweight Capital Goods, Telecommunication Services, Consumer Durables & Apparel, Media & Entertainment and Insurance. The Topix is trading at a PBR of 1.2x, a prospective PER of 12.3x and a dividend yield of 2.35%. Japanese companies remain well capitalised and the positive trend of improving corporate governance among listed Japanese firms continues to be in place. In FY’21 dividends paid grew +10.8% to a record Y15.2trn while buybacks rose by 64.8% to Y7.2trn, the second highest figure on record and just below the Y7.3trn recorded in FY’19. The total shareholder return figure of Y22.3trn in FY’21 was a new record high and further growth seems likely in FY’22.


The Fund fell by -3.30% (JPY share class) in April, underperforming Topix which fell by -2.40% (dividends reinvested).

The fund’s underperformance of the benchmark over the month is attributable entirely to sector allocation, stock selection was slightly positive. There was positive sector allocation from the underweights in Consumer Durables & Apparel, Capital Goods and Consumer Services as well as the overweight in Energy. The heavy overweight in Semiconductors & Semiconductor Equipment was the key cause of negative sector allocation though there were other modest negative contributions from being underweight in the Telecommunication Services, Pharmaceuticals & Biotechnology and Real Estate sectors. At the stock level the top contributors included brewer Asahi Group Holdings, oil & gas company Inpex, household goods company Kao Corporation and the security services company Secom as defensive and commodity stocks continued their outperformance of the index this year as seen in Q1. SPE manufacturer Screen Holdings, the semiconductor packaging maker Ibiden, running shoe maker Asics, TDK and semiconductor wafer maker SUMCO contributed negatively to stock selection. There was no material stock specific news among these weaker performers in the fund but the semiconductor positions and stocks with higher ratings continued to suffer as the market de-risked with rising rates and increasing concerns about an economic downturn lead by high inflation, war in Ukraine and China lockdowns.

We decided to sell our position in the instant noodle manufacturer Nissin Foods as strong share price performance so far this year leaves us with limited upside to our target price, especially in light of the ongoing cost inflation of their key input materials. We also decided to sell our position in the component maker TDK where we have become slightly more nervous about the impact of weaker demand for smartphones on their components and battery business, especially in the light of a potential further slowing in the global economy. We decided to use these funds to purchase three new positions for the fund; while all of these decisions were led by stock specific research they have shifted the portfolio to be slightly more defensively positioned than at the start of the month. We purchased a position in pharmaceutical company Astellas where we believe prospects for growth over the medium term are strong, led by Xtandi, the prostate cancer drug, as well as a promising group of new strategic products coming to the market through 2026 and beyond. We also bought a small position in the power company Kansai Electric Power, Japan’s second largest power company with a dominant position in the Kansai region. Importantly the company owns 7 nuclear power plants, all of which are scheduled to come back online after having been shuttered for various time periods since the disaster at Tokyo Electric Power’s Fukushima plant in 2011. We believe the need for nuclear power as a part of Japan’s resource mix, as they try to reduce reliance on fossil fuels, has been made all the more clear by the recent Russian invasion of Ukraine and we expect the government to take a more supportive approach towards the domestic nuclear power players of which KEPCO should be a significant beneficiary. Finally we purchased a position in Fujifilm where we think the prospects for the CDMO business to drive growth over the medium and long term are positive and in the short term we expect good profits growth helped by the end of a series of restructuring and other one-time charges. We do not feel that the stock price discounts the quality and growth potential of the company and generate high upside to our target price.

Facts & Documents


Fund Domicile: Luxembourg


Fund Launch: 12 June 2014

Base Currency: JPY

Depositary, Administrator, Transfert Agent: BNP Paribas Securities Services (LU)

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

Countries where the fund is registered:
Austria, Germany, Italy, Luxembourg, Switzerland, United Kingdom, France, Singapore

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.


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 USD Hedged Capitalisation share class
ISIN: LU1013118051   Ticker: AEJRUHA LX    Launch: 6 Apr 2022

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