RWC fund taps into Japanese equities

Investment manager RWC has launched a new Ucits fund which will operate as a long-only Japan equity fund focusing on bottom-up stock and constructive engagement with its investee companies.

The fund, called the RWC Nissay Japan Focus Fund, will be a sub-fund of its Luxembourg Sicav, further expanding the firm’s joint venture with Tokyo-based Nissay Asset Management.

It aims to closely replicate an existing AIF Japanese fund which has been in operation for 10 years, and has generated performance of 34 per cent of the Topix index since its inception, and 161 per cent over the past three years, according to RWC.

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The firm has said the fund has already raised $US40m (£27m) in assets.

RWC has revealed that the newly-launched fund will be registered in the major European jurisdictions with the appropriate tax requirements.

The minimum investment for class A, B and R shares are £25,000, £10m, and £25,000 respectively.

Provider view

RWC head of sales James Tollemache said: “With the launch of this new fund, we are able to give investors exposure to established engagement expertise in Japan within a Ucits structure.”

He said that there is a supportive backdrop to the launch of the fund at this time off the back of prime minister Abe’s reforms, adding: “We believe that a ‘constructive engagement’ approach is the only kind of shareholder engagement which can succeed in Japan, and the team’s outstanding success over the years is demonstrated in the outperformance.

“Given the changing environment and the unique and deep-rooted relationship Nissay Asset Management has with the Japanese corporates, we feel we offer something truly different.”

Adviser view

Andrew Whiteley, managing director of Provisio Chartered Financial Planners, based in Cambridgeshire, said: “It seems incredibly expensive. We do not invest in active funds – we tend to use index trackers in our client’s portfolio because the returns are fairly predictable. But I am sure that someone out there will give it the time of day.

“It is difficult to say whether it is a good time to invest in Japanese equities. I’ve read some material that says it is while others say it is not.”

He added: “Investors have to rely on the ability of the manager. They have to be confident that the manager has a good track record and also good fortune.”

Charges

Class A: 1.80 per cent annual management charge. 15 per cent annual performance fee (outperformance of benchmark – TOPIX).

Class B: 0.90 per cent annual management charge. 15 per cent annual performance fee (outperformance of benchmark – TOPIX).

Class R: 0.90 per cent annual management charge. 15 per cent annual performance fee (outperformance of benchmark – TOPIX).

Verdict

While the RWC Nissay Japan Focus Fund is not the cheapest fund in the marketplace, this is not a deal-breaker. The new proposition follows the same strategy as a fund which generated performance of 161 per cent over the Topix over the past three years. This, in tandem with the firm’s prior experience in the Japanese market, will go a long way to ensuring investors that their money is in safe hands.