Underperformance in parts of the Lindsell Train Japanese Equity fund has been disguised by strong performance from Nintendo over the last quarter, fund manager Michael Lindsell says.
In October, the fund was up 0.4 per cent compared to 5.3 per cent in the Topix index. It has also underperformed over the last three months, returning 1.7 per cent compared to 6.3 per cent in the index.
In the year to date, however, the figures reverse with the fund returning -0.2 per cent compared to -8.1 per cent in the index.
The fund does not own cyclical and low margin exporters, which Lindsell says have seen “continued improvement”.
Lindsell says in previous months that trend “had perhaps been disguised by the good performance of Nintendo”.
Before the launch of Pokemon Go in July, Nintendo was trading around JPY14,935, but it soared on the success of the video game and today trades closer to JPY25,550.
Nintendo is the fund’s second largest holding at 8.9 per cent, just behind Kao, which accounts for 9 per cent of the portfolio.
Media and software account for 25.2 per cent of the portfolio.
Pharmaceuticals and healthcare account for 23.6 per cent, but consumer franchises are the largest sector at 42.7 per cent.