Fund Objective

The objective of the trust is to obtain capital growth. In pursuing its objective, the Scheme will invest predominantly in transferable securities of Japanese listed and/or Japanese domicile companies.

View on Past Performance

The Trust recorded a negative return of -8.62% during the quarter compared to -6.71% for the benchmark TOPIX Index. Stock selection was good in the materials and industrial sectors but poor in financials, where real estate orientated companies Urban Corp, Leopalace21 and Joint Corp were the quarter's three main detractors.Offsetting these were positive contributions from Toppan Printing, steel distributor Onoken and logistics companies Nippon Express and Nippon Konpo Unyu Soko as well as Fuyo General Lease Co.

Future Expectations

The outlook for Japanese equities remains uncertain, due to a mix of negative global and Japanspecific factors. Higher energy and raw materials costs and the strength of the yen have affected exporters' profitability and the worldwide credit crunch could inhibit consumer demand.Some major Japanese companies have consequently downgraded their profit forecasts. The Bank of Japan has trimmed its earlier growth forecasts and will remain cautious about moving its key interest rate above the 0.5% level set in February 2007. Although Japanese corporations are tending to cut capital investment, some manufacturing companies may avoid this. Depressed share prices may give the Tokyo market added growth potential.

Fund Details