JPMorgan Japanese (JFJ)

JPMorgan Japanese (JFJ) is managed by Nicholas Weindling, Miyako Urabe and Xuming Tao, an experienced team running a high-conviction, bottom-up strategy across the Japanese equity market. The trust is unconstrained by the benchmark, with the managers instead focussing on identifying high-quality growth companies that, in their view, boast strong balance sheets, durable competitive advantages and the ability to compound earnings over time.

We have seen the nature of “growth” has changed over time with companies in the traditional growth areas like ecommerce witnessing slowdowns whilst sectors like shipbuilding and defence have started to demonstrate strong growth. JFJ’s managers have been successful in identifying opportunities within that space, for example, IHI which has strongly contributed to alpha over 2025. Portfolio activity over the year has also reflected diversification into previously unheld sectors such as real estate and construction, with additions like Taisei Corp and Sumitomo Realty & Development.

During a difficult period for growth strategies, as value has dominated the Japanese market for much of the past five years, JFJ’s Performance has improved meaningfully. The trust has outperformed the TOPIX Index by 15.4 percentage points over the three years to 23/01/2026, reflecting a combination of governance reforms increasingly benefitting higher-quality growth companies and strong stock selection. We see this as a very respectable outcome, especially given that value has continued to outperform growth over the period, a style backdrop that remains a headwind for the trust.

Despite JFJ’s primary objective being capital growth, the board proposed a 28.9% increase to the final Dividend for FY 2025, implying a yield of around 1.2%, reflecting improved portfolio income and rising dividend payouts across Japanese companies. Following the merger with JSGI, JFJ is now the largest trust in the AIC Japan sector, with the increased scale delivering cost benefits and the lowest OCF in the sector (see Charges).

JFJ’s shares trade on a Discount of 7.7% at the time of writing, in line with its five-year average of 7.6%.