The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the Japanese smaller companies stockmarket over any five-year period.
Investment policy and strategy
Core investment: At least 80% of the fund is invested in the shares of smaller companies that are domiciled, or conducting the major part of their economic activity, in Japan. The fund usually holds shares in fewer than 50 companies. Smaller companies are defined as those in the bottom third of total market capitalisation of all publicly listed companies in Japan.
Other investment: The fund also holds cash or assets that can be turned quickly into cash.
Strategy in brief: The investment manager selects stocks from across a wide range of industries.
The focus is on stocks where the share price is not fully reflecting the level of earnings that the company can sustain over the medium to long term. The investment manager believes this can happen because human biases can temporarily prevent investors from making objective assessments of the prospects for company earnings. The investment manager applies disciplined and rigorous fundamental analysis to ensure a high level of conviction around the valuation for each of the companies held in the fund.
Performance comparator: The fund is actively managed. The Russell Nomura Mid-Small Index is a point of reference against which the performance of the fund may be measured.
Risks associated with the fund
The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective, and you may not get back the amount you originally invested.
Changes in currency exchange rates will affect the value of your investment.
The fund invests mainly in smaller companies in Japan. This type of fund can experience bigger price changes when compared to a fund which invests in larger companies.
This fund holds a relatively small number of investments and, as a result, may experience larger price rises and falls than a fund which holds a larger number of investments.
Where market conditions make it hard to sell the fund’s investments at a fair price to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s shares.
Some transactions the fund makes, such as placing cash on deposit, require the use of other financial institutions (for example, banks). If one of these institutions defaults on their obligations or becomes insolvent, the fund may incur a loss.
The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.