23 Oct

The Commonwealth Japan Fund (CNJFX): Historical Overview

WRITTEN BY David Ashworth FEATURED IN Macroeconomic Analysis

An introduction

According to its fact sheet, the Commonwealth Japan Fund (CNJFX) aims “to provide long-term appreciation and current income. The Fund invests primarily in equity securities including common stock, preferred stock and securities convertible into common stock. The Fund may hold the securities of Japanese issuers and debt securities denominated in Yen.”

Its focuses on bottom-up stock selection with a long-term view, according to its fact sheet. “Bottom-up” stock selection means that the fund managers look at individual stocks more closely than the industry they belong to. The underlying belief is that good companies outperform even if the industry they belong to is witnessing difficult times.

The Commonwealth Japan Fund (<a href='https://marketrealist.com/quote-page/cnjfx'><noscript><img class=

The fund has a small portfolio, with only 49 holdings as of June 2015—our latest available breakdown. But keep in mind the following:

  • It was managing assets worth $4.72 million at the end of September 2015.
  • As of June 2015, the fund’s equity holdings included Asahi Intecc Company, Fanuc Corporation (FANUY), Toyota Motor Corporation (TM), and Mizuho Financial Group (MFG), which together form 12.9% of the fund’s portfolio.

Historical portfolios

The CNJFX’s relatively small portfolio is focused on the industrials sector. But even though the sector makes up over 30% of the fund’s assets, its exposure to the sector is down from 37.5% in December 2014 to 32.1% as of June 2015.

Below are a few key components of the fund to keep in mind:

  • Financials commanded the second-biggest chunk of the fund’s portfolio, making up 15.5% of the fund’s June portfolio. But due to a fall in financials, financials only made up 14.4% of the fund’s September 2015 portfolio.
  • The share of financials hasn’t seen a major change in the past year and the changes in its share are primarily due to valuations.
  • Due to a small portfolio in terms of asset size, the fund managers do not have a lot of room to trade. In the past year, the fund has not bought or sold stocks except that of Toyota Motor, which was bought in December 2014.
  • The fund isn’t invested in the telecom services sector at all, which means no exposure to companies like NTT Docomo (DCM).

But how did the Commonwealth Japan Fund (CNJFX) perform in September 2015? Continue to the next part of this series to find out.

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