Large cap underweight holds back Atlantis Japan – Atlantis Japan Growth has published its Annual Results for the year ended 30th April 2017. The year ended 30th April 2017 marked the first anniversary of the appointment of Taeko Setaishi as the lead fund adviser in succession to Ed Merner – although the team approach continues at AIRC with Ed remaining very much
involved in the day to day process. Medium sized and smaller growth companies underperformed over the period and this held back returns – large cap stocks were boosted by the Bank of Japan’s buying of ETFs. The undiluted NAV per share increased by 17.9% during the course of the year whereas the TOPIX increased by 26.9%. The fully diluted NAV per share performance was impacted to the extent of approximately 2.7% by the dilutive effect of the new shares issued in October 2016 under the subscription rights programme. Since the year-end and on a calendar year to date basis to 28th July 2017, the NAV per share is up by 22.2% compared to 7.0% for the TOPIX. The Company’s share price at year end was 161.0p, a 16.7% year-on-year increase and representing a 7.6% discount to NAV.
There is no performance attribution data in the report but the manager does outline the sectors that she is focusing on:
- Out-sourcing: Corporations are responding to tight labour conditions by out-sourcing non-core business activities. The company has exposure to the rising demand for out-sourced corporate services through a position in Benefit One which administers employee benefit and welfare programs for private and public corporations.
- Factory automation: Japan is a global leader in supplying robots and material handling systems to manufacturers and logistics companies. The company’s investments in this area include Daifuku (material handling) and Keyence (sensors).
- Healthcare: Japan’s demographics will require a steady supply of healthcare products and services. Equipment suppliers such as Asahi Intecc and Cyberdyne and drug discovery ventures (Peptidream) are on the leading edge of healthcare services.
- Semiconductor production equipment: The tech sector’s demand for further chip miniaturization will require semiconductor makers to make significant investments in chip production lines. Tokyo Electron and Lasertec command high market shares in equipment occupying critical locations in semiconductor and flat panel production lines.
AJG : Large cap underweight holds back Atlantis Japan