Legal & General Japan Index R

Low cost tracker fund following the FTSE World Japan Index.

  • 55.43p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 64.18p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.65%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.83%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.70%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 11 December 2019, fund data last updated 29 March 2012

This fund's objective is to track the performance of the FTSE World Japan Index as closely as possible. This index consists of predominantly large and mid cap Japanese companies. The replication technique involves purchasing the underlying companies. This will be done in proportion to their weighting in the index, although for the less liquid stocks the manager may employ sampling.

Fund summary

Sector Japan
Structure UNIT TRUST
Launched June, 1989
Size £1,362m
Yield 1.70%
Charging basis Income
Dividends paid 24 Jun, 24 Dec

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.65%
Ongoing charges figure 0.83%

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Investment process

The fund's aim is to track the performance of the Japanese equity market as represented by the FTSE World Japan Index. The fund does this largely through purchasing the stocks in proportion to their weight in the index and the number of investors in the trust. This process is referred to as full replication. However this can be expensive and inefficient for smaller companies in the index so the manager may use stratified sampling where it is deemed appropriate which reduces costs but also increases the divergence from the index (known as tracking error). The trust does not use derivatives in seeking to track the index only to manage cash etc. The manager will also not engage in stock lending, which can help to increase returns. Investors should not therefore be exposed to counterparty risk.

For investors that wish for low cost exposure to Japan the Legal & General Japan Index fund offers one option. In the past the fund has been relatively successful at achieving this and its variance from this index has been roughly in line with peers. Furthermore this tracker does not use derivatives or conduct stock lending and therefore does not expose investors to counterparty risk. Fees are also not excessive. However investors should be aware that trackers by their very nature will underperform the index due to costs.

Manager research

Average monthly relative returns

  • 14/15 -0.12%
  • 15/16 0.08%
  • 16/17 -0.14%
  • 17/18 0.00%
  • 18/19 -0.05%

Bestinvest MRI

  • 3 years -0.06%
  • 5 years -0.04%
  • Career -0.03%
  • 3 years 36.30%
  • 5 years 41.70%
  • Career 48.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Tom Hammond

Hammond joined Legal & General in February 2000 initially as an Investment Reporting analyst and then as a fund accountant for the Linked Life fund. He joined the Index Funds team in November 2005 as an Assistant Manager and was promoted to Fund Manager in September 2008. He manages funds in all regions of the world and currently assists with the management of UK, Global and Asia Pacific equity funds.

Track record

Tom Hammond has 9.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.03%. During the worst period of relative performance (from October 2011 - March 2018) there was a decline of 6% relative to the index. The worst absolute loss has been 16%.

Periods of worst performance

Absolute -16.00% (February 2011 - October 2012)
Relative -6.00% (October 2011 - March 2018)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2019

4.5% Toyota Motor Corp
2.5% Softbank Group Corp
2% Sony Corp
1.7% Mitsubishi Ufj Financial Group
1.5% Keyence Corp
1.4% Takeda Pharmaceutical Co
1.3% Kddi Corp
1.3% Sumitomo Mitsui Financial Group Inc
1.2% Honda Motor Co
1.1% Recruit Hldgs Co Ltd
Source: Trustnet

Sector breakdown

Consumer Goods 23.00%
Industrials 22.00%
Financials 13.00%
Consumer Services 11.00%
Health Care 9.00%
Telecommunications 6.00%
Basic Materials 6.00%
Technology 6.00%
Utilities 2.00%
Cash & Cash Equivalents 2.00%

Portfolio

Around 450 stocks.

Constraints

Portfolio adheres tightly to its reference index, targeting a tracking error of +/-0.5% in 2 out of 3 years.

Key Investor Information - Income

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Key Investor Information - Accumulation

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