The Fidelity Funds - Japan Value Fund (A-ACC-JPY) seeks long-term capital growth by investing primarily in undervalued equity securities of Japanese companies — businesses trading at a discount to their intrinsic value as assessed by the fund manager.
Investment Objective
Japan has long been recognized as a fertile hunting ground for value investors. Many Japanese companies trade at significant discounts to book value or have large cash positions relative to their market capitalization. This fund seeks to identify and invest in such undervalued companies, anticipating a rerating as intrinsic value is recognized by the market.
Japan Value Investing Thesis
Several structural factors support a value case for Japan:
- Corporate governance reform: TSE pressure for companies trading below 1x book value to improve capital efficiency
- Unwinding of cross-shareholdings: Companies selling cross-held shares and returning capital to shareholders
- Warren Buffett’s endorsement: Berkshire Hathaway’s investments in Japanese trading companies validated the value thesis
- Relative valuations: Many Japanese companies trade at multiples well below US equivalents
Value Characteristics
The fund targets companies with:
- Low price-to-book (P/B) ratios
- Low price-to-earnings (P/E) ratios
- Significant net cash or hidden asset value
- Potential catalysts for value realization (buybacks, M&A, spin-offs)
Accumulating Share Class
The ACC share class reinvests income for compounding growth.
Currency
Denominated in JPY.
Risk Considerations
Value traps (cheap stocks remaining cheap indefinitely), currency risk, and the risk that corporate governance reform proceeds more slowly than anticipated.
Risk & Return Metrics
Share class: A-ACC-USD (hedged) | ISIN: LU0997587083 | Data: yfinance (1004 trading days, annualised at 252 days/year)
| Metric | Daily | Annualised |
|---|---|---|
| Expected Return | 0.1122% | 32.64% |
| Risk (Std Dev) | 1.2099% | 19.21% |
| Metric | Value |
|---|---|
| First NAV | 16.8400 |
| Last NAV | 48.1600 |
| Total Return (period) | 185.99% |