Fund Overview

Investment Objective

The Fund aims to generate long-term capital growth by investing in the shares of Japanese companies, or companies that generate a significant amount of their business in Japan. The Fund will apply a 'value' based stock picking approach, investing in a concentrated portfolio of large, medium and small capitalisation companies.

Investment Philosophy

The Fund will apply a 'value' based stock picking approach, investing in a concentrated portfolio of large, medium and small capitalisation companies that exercise a significant part of their economic activities in Japan or are organised under the laws of Japan.

Key Facts

Team of two industry and investment specialists
Typically 45‑55 positions
No benchmark or tracking error constraints
Fundamentally-driven analysis and stock selection

Key Fund Literature

Morningstar Managed Investment Report

30 Sep 2023

Fund Managers & Analysts

Gerard Cawley, CFA

Fund Manager

Chris Smith, CFA

Co-manager

Gerard Cawley, CFA

Gerard joined Polar Capital in January 2005 and is Head of the Polar Capital Japan Team.

He has been manager of the Polar Capital Japan Value Fund, formerly Japan Alpha Fund, since its launch in 2012.

Prior to joining Polar Capital, Gerard worked in the Japanese equity team at Schroder Investment Management.

Academic qualificationsBA in Business Studies, Dublin City University Business School
Professional qualificationsCFA Charterholder
Industry experience23 years

Source & Copyright: CITYWIRE. Gerard Cawley has been awarded an A rating by Citywire for his 3 year risk-adjusted performance for the period 29/09/2020 - 29/09/2023.

Chris Smith, CFA

Chris Smith is co-manager of the Japan Value Fund. He joined Polar Capital in January 2012 as a Japanese equity analyst, prior to which he gained five years’ experience working in accountancy.

He holds a BSc (1st Class Hons) in applied accounting and is a chartered accountant and a CFA charter holder.

Academic qualificationsBSc (1st Class Hons) in Applied Accounting
Professional qualificationsChartered Accountant and a CFA Charterholder
Industry experience11 years

Source & Copyright: CITYWIRE. Chris Smith has been awarded an A rating by Citywire for his 3 year risk-adjusted performance for the period 29/09/2020 - 29/09/2023.

Related Insights

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Japan: A new era for value

Chris Smith, Gerard Cawley

3 Nov 2023

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Three key reminders for Japan’s small caps this year

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11 Oct 2023

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Japan: Boosting capital efficiency

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Countries in which this fund is available

Please click on each country to see share class availability

Risks:

Capital is at risk and there is no guarantee the Fund will achieve its objective. Investors should make sure their attitude towards risk is aligned with the risk profile of the Fund before investing.

Past performance is not a reliable guide to future performance. The value of investments may go down as well as up and you might get back less than you originally invested as there is no guarantee in place.

The value of a fund’s assets may be affected by uncertainties such as international political developments, market sentiment, economic conditions, changes in government policies, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Please see the Fund’s Prospectus for details of all risks.
The Fund invests in the shares of companies, and share prices can rise or fall due to several factors affecting global stock markets.
The Fund uses derivatives which carry the risk of reduced liquidity, substantial loss, and increased volatility in adverse market conditions, such as failure amongst market participants.
The Fund invests in assets denominated in currencies other than the Fund's base currency. Changes in exchange rates may have a negative impact on the Fund's investments. If the share class currency is different from the currency of the country in which you reside, exchange rate fluctuations may affect your returns when converted into your local currency. Hedged share classes may have associated costs which may impact the performance of your investment.
The Fund invests in a relatively concentrated number of companies and industries based in one country. This focused strategy can produce high gains but can also lead to significant losses. The Fund may be less diversified than other investment funds.

Important Information: This is a marketing communication and does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments. Any opinions expressed may change. This website does not contain information material to the investment objectives or financial needs of the recipient. This website is not advice on legal, taxation or investment matters. Tax treatment depends on personal circumstances. Investors must rely on their own examination of the fund or seek advice. Investment may be restricted in other countries and as such, any individual who receives this website must make themselves aware of their respective jurisdiction and observe any restrictions.

A decision may be taken at any time to terminate the marketing of the Fund in any EEA Member State in which it is currently marketed. Shareholders in the affected EEA Member State will be given notification of any decision and provided the opportunity to redeem their interests in the Fund, free of any charges or deductions, for at least 30 working days from the date of the notification.

Investment in the Fund is an investment in the shares of the Fund and not in the underlying investments of the Fund. Further information about fund characteristics and any associated risks can be found in the Fund’s Key Investor Document or Key Investor Information Document (“KID” or “KIID”), the Prospectus (and relevant Fund Supplement), the Articles of Association and the Annual and Semi-Annual Reports. Please refer to these documents before making any final investment decisions. These documents are available free of charge at Polar Capital Funds plc, Georges Court, 54-62 Townsend Street, Dublin 2, Ireland, via email by contacting Investor-Relations@polarcapitalfunds.com or at www.polarcapital.co.uk. The KID is available in the languages of all EEA member states in which the Fund is registered for sale; the Prospectus, Annual and Semi-Annual Reports and KIID are available in English.

The Fund promotes, among other characteristics, environmental or social characteristics and is classified as an Article 8 fund under the EU's Sustainable Finance Disclosure Regulation (SFDR). For more information, please see the Prospectus and relevant Fund Supplement.

ESG and sustainability characteristics are further detailed on the investment manager’s website: (https://www.polarcapital.co.uk/ESG-and-Sustainability/Responsible-Investing/).

A summary of investor rights associated with investment in the Fund is available online at the above website, or by contacting the above email address. This document is provided and approved by both Polar Capital LLP and Polar Capital (Europe) SAS.

Polar Capital LLP is authorised and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom, and the Securities and Exchange Commission (“SEC”) in the United States. Polar Capital LLP’s registered address is 16 Palace Street, London, SW1E 5JD, United Kingdom.

Polar Capital (Europe) SAS is authorised and regulated by the Autorité des marchés financiers (AMF) in France. Polar Capital (Europe) SAS’s registered address is 18 Rue de Londres, Paris 75009, France.

Polar Capital LLP is a registered Investment Advisor with the SEC. Polar Capital LLP is the investment manager and promoter of Polar Capital Funds plc – an open-ended investment company with variable capital and with segregated liability between its sub-funds – incorporated in Ireland, authorised by the Central Bank of Ireland and recognised by the FCA. Bridge Fund Management Limited acts as management company and is regulated by the Central Bank of Ireland. Registered Address: Percy Exchange, 8/34 Percy Place, Dublin 4, Ireland.

Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.

Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.

Benchmark: The Fund is actively managed and uses the TOPIX Total Return Index as a performance target and to calculate the performance fee. The benchmark has been chosen as it is generally considered to be representative of the investment universe in which the Fund invests. The performance of the Fund is likely to differ from the performance of the benchmark as the holdings, weightings and asset allocation will be different. Investors should carefully consider these differences when making comparisons. Further information about the benchmark can be found http://www.jpx.co.jp/english/markets/indices/topix. The benchmark is provided by an administrator on the European Securities and Markets Authority (ESMA) register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.

Country Specific Disclaimers When considering an investment into the Fund, you should make yourself aware of the relevant financial, legal and tax implications. Neither Polar Capital LLP nor Polar Capital Funds plc shall be liable for, and accept no liability for, the use or misuse of this document.

The Fund is registered for sale to all investors in the countries listed above. Investors should make themselves aware of the relevant financial, legal and tax implications if they choose to invest.

Source & Copyright: ©2023 Morningstar, Inc. All Rights Reserved. Rating representative of the S Yen Share Class, as at 30/09/2023. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. This rating is 10% Analyst-Driven and based on Data Coverage of 96%. For more detailed information about the Morningstar's Medalist rating, including its methodology, please go to: https://shareholders.morningstar.com/investor-relations/governance/Compliance--Disclosure/default.aspx.For disclosure and detailed information about this fund please request the full Morningstar Managed Investment Report from investor-relations@polarcapitalfunds.com.

An ESG framework for Japanese equities

Our approach to ESG is designed to effectively evaluate potential investee companies against a large number of indicators from across the three overarching Environmental, Social and Governance categories, on both a current and future basis.

Along with the Fund’s exclusions and engagement process, we have implemented a holistic approach to integrating sustainability, with the aim of building a portfolio of companies that demonstrate strong environmental and social characteristics.

ESG Policy Documents

SFDR Level 2 Website Disclosure

28 Aug 2023

Exclusions

Applying norms-based and negative screens

The Japan Value Fund’s initial investment universe is subject to the following two exclusion criteria. Stock ideas which do not suitably align with either of these are unsuitable for investment, and are not considered any further for inclusion into the portfolio.

1. Norms-based screening

This ensures that potential investee companies that are involved in controversial practices are excluded from investment. We consider a number of different international conventions as part of this process, such as the UN’s Global Compact.

2. Negative screening

We also exclude companies we believe may have a negative impact on the world by virtue of their business activities. We exclude companies that are involved in controversial weapons production, or that derive more than a certain percent of their revenues from the following activities.

Thermal coal production and distribution (10% revenue threshold)

Tobacco production (5% revenue threshold)

Conventional weapons production and distribution (10% revenue threshold)

ESG Integration

Scoring companies against our ESG Framework

We assess potential investments against a range of ESG indicators, looking at both their current practices as well as future anticipated changes. Following evaluation against this framework, companies are scored across three weighted categories, then combined to reach a final score between 3-15.

Companies that score below six are deemed to have not met the required standards and are excluded from investment. We will also normally exclude companies that score in the bottom quarter of the governance assessment.

Environmental (40% weighting)

Considering the overall environmental impact of a company, its environmental goals and targets and its performance against these.

Social (20% weighting)

Assessing the social practices of investee companies on factors such as organisational culture, stakeholder engagement and diversity.

Governance (40% weighting)

Looking at factors such as Board effectiveness, ownership and shareholder structure, management alignment and remuneration, as well employee relations and tax compliance.

Engagement

Engaging on material ESG issues

Where a company scores poorly on one or more of the ESG framework categories, we may engage further with them.

How we engage:

Written Communications

Company Meetings

Shareholder Votes

Voting

Active stewards of our clients' capital

We will always vote in the best interests of clients, and for long-term value generation. We aim to vote on 100% of our holdings and are not afraid to vote against management where we believe that is necessary.

Polar Capital uses Institutional Shareholder Services (ISS) to assist with proxy voting. Stewardship is a very important part of our fiduciary duty, and we see ourselves as stewards of our clients’ capital. Find out more here.

Find out more about Polar Capital's voting


Items voted	559
Votable items	559
Ballots voted	47
Votable ballots	47
Meetings voted	47
Votable meetings	47

Vote Cast Statistics

	Votes FOR	427
	Votes AGAINST	131
	Votes ABSTAIN	1
	Votes WITHHOLD	0
	Votes on MSOP	0

All voting data as at 30 June 2023

Related Insights

Japan

Japan: A new era for value

Chris Smith, Gerard Cawley

3 Nov 2023

Japan

Three key reminders for Japan’s small caps this year

Chris Smith, Gerard Cawley

11 Oct 2023

Japan

Japan: Boosting capital efficiency

Chris Smith

11 Jul 2023

Japan

Improving management of company capital is opening up Japan to investors

Chris Smith

15 Jun 2023

Countries in which this fund is available

Please click on each country to see share class availability

Risks:

Capital is at risk and there is no guarantee the Fund will achieve its objective. Investors should make sure their attitude towards risk is aligned with the risk profile of the Fund before investing.

Past performance is not a reliable guide to future performance. The value of investments may go down as well as up and you might get back less than you originally invested as there is no guarantee in place.

The value of a fund’s assets may be affected by uncertainties such as international political developments, market sentiment, economic conditions, changes in government policies, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Please see the Fund’s Prospectus for details of all risks.
The Fund invests in the shares of companies, and share prices can rise or fall due to several factors affecting global stock markets.
The Fund uses derivatives which carry the risk of reduced liquidity, substantial loss, and increased volatility in adverse market conditions, such as failure amongst market participants.
The Fund invests in assets denominated in currencies other than the Fund's base currency. Changes in exchange rates may have a negative impact on the Fund's investments. If the share class currency is different from the currency of the country in which you reside, exchange rate fluctuations may affect your returns when converted into your local currency. Hedged share classes may have associated costs which may impact the performance of your investment.
The Fund invests in a relatively concentrated number of companies and industries based in one country. This focused strategy can produce high gains but can also lead to significant losses. The Fund may be less diversified than other investment funds.