LONDON (Alliance News) - Fidelity Japan Trust PLC on Tuesday said it outperformed its benchmark in the first half of the year due to particularly strong growth among the retail, healthcare and services stocks in its portfolio.
In the six months to June 30, Fidelity Japan recorded a net asset value total return of 8.3% compared to the 0.5% achieved by its benchmark during the period. As the company changed from the Russell Nomura Mid/Small Cap Index to the TOPIX Index, its benchmark is an amalgamation of the two.
Retail, services and healthcare-related stocks were credited by the company with the reason it surpassed its benchmark. Musical instrument and audio equipment company Yamaha Corp was named as Fidelity's "standout contributor".
However, the company said, many of its strong-performing 2017 stocks faced headwinds this year, and the portfolio was underweight in utilities and customer staples, which performed well in the risk-averse market, limited Fidelity Japan's returns.
As at June 30 the trust's net asset value per share was 177.71 pence, up from 135.69p the year before and up from 164.10p at the end of 2017.
Fidelity Japan's total investment gains fell very slightly to GBP14.66 million from GBP14.71 million. The company's half-year statement did not include a dividend declaration.
"Earnings momentum clearly slowed in the first quarter of 2018, but results generally look quite healthy," Fidelity Japan said.
"Japanese companies are also delivering higher returns on equity...leading to better profitability...While forward guidance is typically cautious valuations still look attractive," the company added.
Shares in Fidelity Japan were up 0.3% at 159.41 pence on Tuesday.
Fidelity Japan Trust (FJV)