iShares MSCI Japan is quoted in sterling on the London Stock Exchange, and like other funds within the iShares range, there are no subscription or redemption fees, although there is a three per cent switching fee for transfers to other iShares funds.
The fund aims to track the MSCI Japan Index and offers exposure to over 300 large and mid-cap Japanese companies. The portfolio offers a diversified mix of companies that represent 85 per cent of the market from all of the major industry groups.
iShares MSCI Japan has been available as a UK ETF for just under five years; a period in which its base index has nudged up by a paltry 0.88 per cent on an annualised basis. Admittedly, this still places Japan's market performance ahead of the UK's, but it's rather anaemic when set against its main trading competitors in the Far East.
However, it could certainly be argued that few equity markets offer better value at the moment, with the Nikkei trading at an average of around 1.4 times book value. If you were minded that Japanese stocks are woefully undervalued on this basis, then iShares MSCI Japan offers a straightforward way of exploiting a long overdue recovery in that market's fortunes, especially considering that the base index has risen by around 15.5 per cent since Easter. The fund's TER of 0.59 per cent is just under the average rate for UK-registered tracker funds, according to the latest statistics from Lipper.
The portfolio is usually comprised of between 330-360 stocks, but in accurately tracking the MSCI Japan Index (in 2009, the tracking error was -0.7 per cent) it has a heavy bias towards blue chip stocks such as Toyota, Honda, Sony, Mitsubishi and Panasonic.
ISHARES MSCI JAPAN (IJPN) | |||
|---|---|---|---|
| PRICE | 613p | 6 MONTH PERFORMANCE (PRICE) | 15.53%* |
| SIZE OF FUND | US$1.77bn | 1 YEAR PERFORMANCE (PRICE) | 3.71%* |
| LAUNCH DATE | 10 Oct 04 | 3 YEAR PERFORMANCE (PRICE) | -3.81%* |
| INDEX | MSCI Japan Index | TOTAL EXPENSE RATIO | 0.59%* |
| LEGAL STRUCTURE | OEIC | YIELD | 0.85%* |
| BASE CURRENCY | US$ | MORE DETAILS | uk.ishares.com |
| BETA | 0.73* | ||
SOURCE: Barclays Global Investors & *Morningstar (17 Sept)
Top ten holdings (as at 31 Aug)
| Holding | Percentage |
|---|---|
| Toyota Motor Corp | 5.46 |
| Mitsubishi UFJ Fin Grp | 2.74 |
| Honda Motor Co | 2.4 |
| Canon Inc | 1.9 |
| Sumitomo Mitsui Finl Grp | 1.78 |
| Tokyo Electric Power Co | 1.47 |
| Panasonic Corp | 1.43 |
| Mizuho Financial Group | 1.42 |
| Takeda Pharmaceutical | 1.4 |
| Nintendo Co | 1.34 |
Sector breakdown
| Sectors | Percentage |
|---|---|
| Consumer Goods | 29.22 |
| Industrial Materials | 19.09 |
| Financial Services | 18.41 |
| Business Services | 7.66 |
| Healthcare | 6.4 |
| Consumer Services | 4.91 |
| Utilities | 4.87 |
| Hardware | 3.89 |
| Telecommunications | 3.05 |
| Other | 2.5 |
