Japan returns still lag amid volatility

Sector's stocks continue to underperform developed market peers, though top-decile managers find returns with focus shift

The IMA Japan sector has historically been one of the most volatile, and this year has been no exception as Japanese stocks underperformed developed market peers. In 2009, the Topix has risen 1.8% and the Nikkei 225 has climbed 9.7% to 5 November, the smallest increases among the world's 10 largest indices. By contrast, the Standard & Poor's 500 Index in the US has advanced 16% this year, and the Dow Jones Stoxx 600 Index in Europe has added 21%. According to Morningstar, over one year to 2 November, the IMA Japan sector has generated double-digit returns, up 12.4%. While curren...