| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.07% | 2.42% | 2.42% |
The Japan Opportunities Fund returned 2.42% in Q1 2026, underperforming the TOPIX Index which gained 4.15%. Japanese equities rose amid optimism about the Liberal Democratic Party's supermajority election victory, led by Prime Minister Takaichi, providing a decisive mandate for pro-growth policies. Tokio Marine and Tokyo Ohka Kogyo were top contributors, with Tokio Marine surging after Berkshire Hathaway's National Indemnity acquired a strategic stake, while TOK benefited from strong semiconductor materials demand. Software holdings Fujitsu and Recruit Holdings detracted due to AI disruption concerns. The manager initiated a position in OBIC Business Consultants, viewing the AI-driven selloff as an attractive entry point given the company's dominant SME accounting software position and strong balance sheet. Pan Pacific International was exited after nearly a decade due to high valuations. Looking forward, the manager remains positive on Japan's structural outlook, citing reasonable valuations, sound fundamentals, and ongoing corporate governance improvements as tailwinds for selective stock picking.
The fund seeks long-term capital appreciation by investing in undervalued, cash-generative and capital-efficient Japanese businesses through rigorous fundamental research and strict valuation discipline.
We remain positive about Japan's long-term structural outlook. We think valuations remain reasonable, corporate fundamentals are sound and earnings momentum is intact. We remain confident in our portfolio holdings and believe disciplined stock selection will remain the key driver of long-term performance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 16 2026 | 2026 Q1 | 4186.T, 4684.T, 6098.T, 6702.T, 7532.T, 8766.T | AI, Governance, insurance, Japan, semiconductors, software | 8591.T | Japan Opportunities Fund gained 2.42% in Q1 2026, lagging the TOPIX on software weakness from AI disruption fears. Tokio Marine surged on Berkshire partnership while Tokyo Ohka Kogyo benefited from semiconductor materials demand. Manager remains constructive on Japan's structural outlook, emphasizing quality stock selection amid political stability and corporate governance improvements. |
| Jan 16 2026 | 2025 Q4 | 1803.T, 4091.T, 4385.T, 4519.T, 6141.T, 6758.T | AI, Construction, Corporate Governance, E-Commerce, inflation, Japan, Pharmaceuticals | - | Japan Opportunities Fund outperformed in Q4 as new PM Takaichi's pro-growth policies and robust corporate results drove Japanese equities to all-time highs. Construction and e-commerce holdings led gains while industrial gas faced macro headwinds. Fund added pharmaceutical exposure and remains focused on quality businesses to navigate volatility while capitalizing on inflation pass-through and AI opportunities. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI remains a durable global investment theme including in Japan. While investor attention has often focused on high-beta opportunities, there is a widening search for quality beneficiaries, expanding the opportunity set and enabling selective investment in attractively valued, high-quality companies aligned with the theme. Software businesses faced pressure due to concerns about AI-driven disruption risks and potential negative impact on labour markets. |
Software Disruption Technology Innovation Automation |
JapanPrime Minister Takaichi's decisive election victory provides a strong mandate to advance pro-growth policies over the coming four years. Measures aimed at strengthening Japan's industrial base and national defence should support activity across multiple sectors. Ongoing improvements in corporate governance and shareholder value remain a tailwind for Japanese equities with expected revisions to the Corporate Governance Code and Companies Act. |
Politics Governance Reform Industrial Defense | |
SemiconductorsTokyo Ohka Kogyo benefited from strong trading statement and earnings upgrades due to robust demand for advanced semiconductor materials. The company operates in the semiconductor materials space which is experiencing strong demand dynamics. |
Materials Electronics Technology Manufacturing | |
| 2025 Q4 |
BuybacksMultiple portfolio companies executed significant share repurchase programs in 2025. Virgin Wines repurchased around 10% of outstanding shares, DCC completed a tender offer for 12% of shares, Associated British Foods bought back 5%, and Naked Wines retired approximately 7% through buybacks and tender offers. |
Share Repurchases Capital Allocation Value Creation |
AIThe manager views AI concerns as market overreaction, particularly regarding comparison and classified portal businesses. He believes the market is 'throwing the baby out with the bathwater' when factoring AI impact on platform business models, underestimating their adaptability under experienced management. |
Artificial Intelligence Platform Business Market Overreaction | |
ValueThe fund focuses on companies trading below intrinsic value, with several holdings in 'net-net' situations where market capitalization trades below excess cash. The manager emphasizes purchasing companies at reasonable prices as a core investment principle and sees current low valuations as creating mechanical spring tension for future rebounds. |
Net Net Intrinsic Value Valuation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 16, 2026 | Fund Letters | Janus Japan Opportunity Fund | 8591.T | OBIC Business Consultants | Financial Conglomerates | Application Software | Bull | New York Stock Exchange | Accounting Software, AI disruption, contrarian, Japan Technology, net cash, SME Software, value opportunity | Login |
| TICKER | COMMENTARY |
|---|---|
| 8766.T | Shares in Tokio Marine surged after National Indemnity (which is owned by Berkshire Hathaway) acquired a stake in the insurer, forming a strategic partnership. This partnership will support Tokio Marine with its acquisition strategy, enabling the company to strengthen and diversify business channels. |
| 4186.T | TOK's share price benefited from a strong trading statement and a number of earnings upgrades due to the robust demand for advanced semiconductor materials. |
| 6702.T | Holdings in software businesses such as Fujitsu detracted. The sector came under pressure due to concerns about artificial intelligence (AI)-driven disruption risks and its potential negative impact on labour markets. |
| 6098.T | Holdings in software businesses such as Recruit Holdings detracted. The sector came under pressure due to concerns about artificial intelligence (AI)-driven disruption risks and its potential negative impact on labour markets. |
| 4684.T | We initiated a position in OBIC Business Consultants (OBC), which has been substantially de-rated amid concerns that its business model could be disintermediated by AI. We believe OBC's dominant position in the small- and medium-enterprise accounting software market provides a degree of insulation from these risks, while its large net cash balance further limits risks. The sharp decline in its share price presented what we viewed as an attractive entry point. |
| 7532.T | We exited a long-held position in discount retailer Pan Pacific International Holdings, after nearly a decade of ownership, as we judged the valuation to be high. |
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