13 Aug

Market Cap Breakdown for the 4 Japan-Focused Mutual Funds

WRITTEN BY David Ashworth FEATURED IN Macroeconomic Analysis

Analysis period

We are analyzing the following four Japan-focused mutual funds in this series:

  • T. Rowe Price Japan Fund (PRJPX)
  • Fidelity Advisor Japan Fund (FPJAX)
  • Nuveen Tradewinds Japan (NTJAX)
  • Matthews Japan Fund (MJFOX)

Our analysis on market cap breakdown will be based for the one-year period ended July 24, 2015. All market cap level exposures referred to in this article will be an average holding during this period and not the latest available.

Market Cap Breakdown for the 4 Japan-Focused Mutual Funds

Market cap exposure

FPJAX’s average exposure to stocks belonging to different market caps has shown a clear favor for large-cap stocks. About 81.1% of its holdings for the past year were in the large-cap space. It also had the smallest exposure to small-cap stocks among the four funds chosen for this review. Further, it was the only fund among the four that had some allocation to cash, averaging ~2% for the period under analysis.

While PRJPX and NTJAX had similar exposure to large-cap stocks, PRJPX favored the mid-cap space while NTJAX was more inclined toward small-cap stocks than mid-cap stocks.

MJFOX, which outperformed the other three funds in terms of returns for the one-year period ended July 24, had an interesting portfolio. This fund invested 55.6% of its assets in large-cap stocks—the lowest among the lot. Also, its exposure to the mid- and small-cap space was quite similar, showing no clear bias toward either of the segments.


While the exposure to large caps benefitted the NTJAX the most, with this space contributing 8.2% to its total returns, the MJFOX came in second, even with the least assets invested in this space among the four funds. This shows that the stocks selection by the fund manager of the MJFOX worked in the past one year. The fund’s top contributors to return in the large-, mid-, and small-cap space were Sysmex Corp. (SSMXY), Cookpad (CPADF), and Benefit One, respectively. On the other hand, negative contributors to return included ORIX Corporation (IX), Honda Motor (HMC), and SoftBank Group (SFTBY).

Stock picks by MJFOX also favored them in their bets on the mid- and small-cap space. The fund had the highest average exposure to mid-cap stocks among the four funds, and they contributed 5.8% to the fund’s total returns, thus benefitting it the most among its peers.

The PRJPX’s and the FPJAX’s small-cap picks did not help these funds, with the former seeing a very small contribution to total returns by stocks of that segment while the latter’s picks from the segment contributed negatively to total returns.

After looking at the market cap exposure, let’s look at the portfolios of these funds in detail in the next article.

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