The Nav of the Morant Wright Japan Income trust fell 5.35% over 13 months from launch to the end of ...
The Nav of the Morant Wright Japan Income trust fell 5.35% over 13 months from launch to the end of December 2006 while its share price dropped 3% over the period.
While the fund is not measured against any particular benchmark, over the same period, after adjusting for the decline in the yen against sterling, the Topix fell 3.2% and the Topix Small Companies index declined 14.5%.
Managers Stephen Morant and Ian Wright said nearly all sterling-based equity investors in Japanese equities suffered over the period with the trust among the better-performing vehicles during 2006.
They said that, in the first few months after launch, they faced a difficult time as relevant indices rose significantly though their caution on chasing a rising market was vindicated following the Livedoor scandal in early 2006.
“However this, combined with the weakness of the yen, set the tone for the rest of the year,” they said.
“Although the Topix rose 1.9% in 2006 in local terms the strength was very much concentrated in larger companies, particularly those with overseas exposure.
“Smaller stocks were hit particularly hard with, for instance, the Topix second section down 19.3% and the more speculative TSE Mothers down 56.3%. Although we are not involved in the latter area it was not in general a helpful background for our portfolio, which is concentrated in medium and small domestic companies.”