Fidelity Japan Trust PLC (LON:FJV) published its monthly factsheet for the period ended May 2024.
Portfolio Manager Commentary
The Trust recorded NAV returns of 1.0% over the 12 months to May 2024, underperforming the reference index, which returned 15.2%. The Trust’s share price fell by 0.9% over the same period and the discount to NAV widened marginally.
While the Japanese market has recorded historical gains, significant style divergences have persisted. The US bond yield cycle and accompanying currency trends have exerted a sizeable impact on style returns. These trends have generated performance headwinds, particularly during periods of sharp rises in long-term rates. Against this backdrop, the underweight exposure to value areas of the market have weighed on relative returns. Holdings in machinery companies that faced a slowdown in earnings due to sluggish demand in China also detracted from performance. Conversely, key positions in technology-related cyclicals outperformed and holdings in differentiated small caps added value.