Fund Objective

The Fund aims to achieve capital growth.

View on Past Performance

Japanese shares fell by 12.6% in September, reflecting the crisis in the global financial system and the impact of slowing global growth.The fund has become more defensively positioned. Exposure has been maintained in areas where Japan retains key competitive advantages and where we believe these strengths will be enhanced in a hostile environment. Autos are a prime example. We bought stock in NTT Data and Sompo Insurance to increase our exposure to high-quality domestic names.We invested in Nippon Sheet Glass after a positive meeting with the company regarding restructuring and the longer-term potential of its solar panel business. We trimmed Nidec, given the potential for a slowdown in the personal computer market, and Dai ichi Sankyo, where we await announcements by the US authorities regarding drug approvals.We sold Daito Trust, reflecting concern that the expected private equity purchase of part of the company may experience difficulties.

Future Expectations

The financial system and consumer finances are in very good health. Nonetheless, deteriorating prospects for global growth will affect Japan and the fund is likely to remain defensively positioned until the environment improves.

Fund Details