M&G (Lux) Japan Smaller Companies Fund

Objective and investment policy

Objective

The fund aims to provide a combination of capital growth and income that is higher than the Japanese smaller companies stockmarket over any five-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in the shares of companies that are based, or do most of their business, in Japan.

Smaller companies are defined as the bottom half in terms of total market capitalisation of all publicly listed companies in Japan. The fund usually holds shares in fewer than 50 companies.

Other investment: The fund may also invest in other funds (including funds managed by M&G), cash or assets that can be turned into cash quickly.

Derivatives: The fund may use derivatives with the aim of reducing risks and costs or managing the fund more efficiently.

Strategy in brief: The fund employs a disciplined approach to analyse and select each company. The strategy aims to benefit from the rise and fall of stock prices. The investment manager invests in companies whose shares are deemed to be undervalued because investors do not always assess investments rationally. The fund manager seeks to profit from such behavioural biases.

Performance comparator: The fund is actively managed. The Russell Nomura Mid-Small Cap Net Return Index is a point of reference against which the performance of the fund may be measured. It is a net return index which includes dividends after the deduction of withholding taxes.

Risks associated with the fund

The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

The fund invests in shares of smaller companies which may be less liquid and more volatile in price than shares of larger companies.

The fund holds a small number of investments, and therefore a fall in the value of a single investment may have a greater impact than if it held a larger number of investments.

The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.

In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.

The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.

Further details of the risks that apply to the fund can be found in the fund's Prospectus.

Other information

The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.

 

Performance

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate. Past performance is not a guide to future performance.

On 28 March 2013, the fund’s performance comparative index changed.

Past performance shown from the date selected to 27 March 2013 is the Japan TSE Second Section Index. Past performance shown from 28 March 2013 is the Russell/Nomura Mid-Small Index.


Source: Price: State Street. Performance: Morningstar. For non-Sterling share classes for fixed income and global convertibles funds, performance figures are shown on a price to price with gross income reinvested basis*. For equities and multi-asset funds, performance figures are shown on a price to price with net income reinvested basis. For Sterling share classes performance figures are on a price to price with net income reinvested basis. Performance figures may not reflect all relevant charges.

Fund Team

Carl Vine

Carl Vine - Fund manager

Carl Vine was appointed fund manager of the M&G Japan Fund, M&G Japan Smaller Companies Fund, M&G (Lux) Japan Fund and the M&G (Lux) Japan Smaller Companies Fund in September 2019. Carl has more than 22 years of investment experience in Japanese and Asia Pacific equities. Prior to joining M&G, he was with Oxford-based Port Meadow Capital Management, a boutique investment firm he co-founded in 2014 with Dave Perrett. Before that, he was a Managing Director and Portfolio Manager for SAC Capital Advisors in Hong Kong, responsible for investment in Asia Pacific, including Japan. He was a responsible officer for the business locally, and was the Asian-based member of their global investment committee. Prior to this, he was a Managing Director at UBS in Hong Kong, where he invested proprietary capital across Asia Pacific and Japan. He also spent time as a Principal for TPG-Axon Capital. Carl began his career with Prudential Portfolio Managers in London, before relocating to Tokyo to open Prudential’s Japan office. Carl holds a Bachelor of Arts (Hons) in Politics, Philosophy & Economics from Oxford University (1997).

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Dave Perrett

Dave Perrett - Deputy Manager

Dave Perrett was appointed deputy fund manager of the M&G Japan Fund, M&G Japan Smaller Companies, M&G (Lux) Japan Fund and the M&G (Lux) Japan Smaller Companies Fund in September 2019. Dave has more than 28 years of investment experience. Prior to joining M&G, he was with Oxford-based Port Meadow Capital Management, a boutique investment firm he co-founded with Carl Vine in 2014. Prior to that, he was a Managing Director and Senior Portfolio Manager with UBS, specialising in investing capital across the Asia Pacific region and was based in Hong Kong until June 2009. He served as Chief Investment Officer, Life and Institutional for Prudential Asset Management (Hong Kong) from 2001 to 2004. Dave began his career with Prudential (London) in 1991. Dave holds a Bachelor of Science, Economics (1991) from the London School of Economics and a Master of Science from the University of London (1995).

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Sunny Romo

Sunny Romo - Investment specialist

Sunny Romo is the investment specialist covering Japanese equities and the Value range. She joined M&G in June 2018 from Insight Investment, where she looked after their institutional relationships with Japanese investors. Prior to that, Sunny spent nine years at Asset Management One as an equities trader, and later as senior relationship manager for EMEA clients. Sunny is a committee member of the Pension and Lifetime Savings Central London Group. She is fluent in English, Japanese and Mandarin Chinese. Sunny graduated from the University of Reading with a BA in International Relations and Economics. She is a CAIA charter holder and holds the Investment Management Certificate (IMC).

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Ratings

Rating is at a share class level

2 Star Rating

Ratings as at 31/07/2019. The Morningstar Overall Rating. Copyright © 2019 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2019 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.

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The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.