Atlantis Japan’s results for the year ended 30 April 2022 confused me as the chairman’s statement managed to avoid telling investors what the NAV return was. However, it is in the announcement – in the investment adviser’s report – and it’s not great – a -21.3% total return in a year where the TPOIX benchmark returned -5.0%. A widening discount left shareholders with a return of -26.9%.
The company pays an enhanced dividend (1% of average NAV in the final month of the fund’s accounting year quarterly). The quarterly dividends for the new financial year will fall to 2.15p from 2.88p, therefore.
Ongoing charges rose to 1.65% from 1.58%.
There will be a continuation vote at next year’s AGM.
Extract from the manager’s report
Sectors that contributed positively included Other Financing Business, Marine Transportation and Wholesale Trade. There were strong contributions from software testing specialist SHIFT (3697 JP), semiconductor manufacturing gas purveyor Japan Material Co (6055 JP) and niche pre-owned auto insurance and warranty provider Premium Group Co (7199 JP). Sectors that underperformed included Services, Information & Communication and Machinery. Stocks that underperformed included the investor relations consultant IR Japan Holding (6035 JP), precision small motor specialist Nidec (6594 JP), and mergers and acquisitions specialist Nihon M&A Center (2127 JP).
Three factors weighed on the Company’s performance. The first was the persistent sell-off in growth and technology stocks. The second was the technical impact of the restructuring of the Tokyo Stock Exchange section categories, effective from April 2022. This intensified the sell-off in Japanese small caps which had already been hit by a global sell-off. The third was the lead up to and invasion of Ukraine in February, which exacerbated volatility and the shift from growth to value compounded by the acceleration of inflation and global monetary tightening.
AJG : Atlantis Japan NAV sinks