Japanese Smaller Companies funds have also performed well, with 50 per cent of the top-10 outperformers in five years being of the smaller company variety. Top of these is the £74m M&G Japan Smaller Companies fund.
Manager Max Godwin, who has been at the helm of the fund since March 2007, invests in companies that appear in the bottom third of all publicly listed equity in Japan by market capitalisation. In five years, the fund has returned 142.43 per cent and has consistently produced top-quartile returns over one, three and 10-year time periods.
Similarly, the £87.9m Baillie Gifford Japanese Smaller Companies fund has also produced outstanding returns, and this year made its way into the Investment Adviser 100 club of consistently outperforming funds.
Of course, with good always comes bad and there have been some abysmal performers – all of which come from the IMA Japan sector.
The worst, based on five-year performance data, is the Axa Rosenberg Japan fund with a return of just 18.74 per cent to August 8. Closely following this is the Gam Star Japan Equity fund, with a 21.83 per cent return, although the past six months have seen this fund jump into the top quartile.
For investors, the key is to wade carefully through the products available and keep one eye firmly on the Japanese government and the potential for continued success.
Jenny Lowe is features editor at Investment Adviser
