Platinum Japan (PLA0003AU) Report & Performance

What is the Platinum Japan fund?

Platinum Japan aims to provide capital growth over the long-term by investing in undervalued companies in the Japanese and Korean region. The Fund primarily invests in the listed securities of Japanese and Korean companies. These companies may list their securities on exchanges other than those in Japan or Korea and the Fund may invest in them.

  • The Fund may invest in companies not listed in Japan or Korea, but where their predominant business is conducted in Japan or Korea.
  • The Portfolio will ideally consist of 40 to 80 securities that Platinum believes to be undervalued by the market.
  • Cash may be held when undervalued securities cannot be found.
  • Platinum may short sell securities that it considers overvalued.
  • The Portfolio will typically have 50% or more net equity exposure.
  • The proportion of Korean securities in the Portfolio will be limited to a maximum of 25% of the value of the Portfolio, at the time of investment.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Platinum Japan

Platinum Japan Fund Commentary September 30, 2023

The Fund returned -1.6% for the quarter in AUD terms as positive local currency performance was offset by a declining Yen.

The massive inflows to the Japanese market from foreign buying in the prior quarter partially reversed this quarter, with the selling accelerating in the final two weeks of the quarter. The market’s solid upward progress through most of the quarter turned about-face in line with the foreign selling, erasing the vast majority of the quarter’s gains.

The move up in the market was underpinned by strength in the banking sector. The Bank of Japan’s (BoJ) decision to allow the ten-year bond yield to rise while keeping the short-term policy rate negative implies improving net interest margins for banks, thus leading to an increase in the market’s profit expectations. The weakening yen could push the BoJ to relax yield-curve-control further, which is also likely contributing to optimism around the banks.

The Japanese automobile sector received a boost from the lower yen as it lifts the value of offshore earnings and improves the competitiveness of their Japanese labour force A lack of exposure to these two key areas of market strength – banks and autos – hurt the Fund’s relative performance in the quarter.

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
Platinum JapanPLA0003AUManaged FundsForeign EquityLong ShortForeign Equity - Long Short IndexDeveloped -World Index612.70 M1.35%00.3%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Platinum Japan-3.42%0.58%-1.15%-0.13%7.93%12.08%9.95%12.99%-10.91%-13.42%-36.94%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Platinum JapanForeign Equity - Long Short Index-13.79%-1.69%NA%NA%NA%1.069.9%10.52%0.620.61

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Platinum JapanYes-https://www.platinum.com.au/-

Product Due Diligence

What is Platinum Japan

Platinum Japan is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Long Short Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Platinum Japan has Assets Under Management of 612.70 M with a management fee of 1.35%, a performance fee of 0 and a buy/sell spread fee of 0.3%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Platinum Japan has returned -3.42% in the last month. The previous three years have returned -0.13% annualised and 12.99% each year since inception, which is when the Platinum Japan first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Platinum Japan first started, the Sharpe ratio is NA with an annualised volatility of 12.99%. The maximum drawdown of the investment product in the last 12 months is -10.91% and -36.94% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Platinum Japan has a 12-month excess return when compared to the Foreign Equity - Long Short Index of -13.79% and -1.69% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Platinum Japan has produced Alpha over the Foreign Equity - Long Short Index of NA% in the last 12 months and NA% since inception.

What are similar investment products?

For a full list of investment products in the Foreign Equity - Long Short Index category, you can click here for the Peer Investment Report.

What level of diversification will Platinum Japan provide?

Platinum Japan has a correlation coefficient of 0.61 and a beta of 1.06 when compared to the Foreign Equity - Long Short Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on Platinum Japan and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Platinum Japan with the Developed -World Index?

For a full quantitative report on Platinum Japan compared to the Developed -World Index, you can click here.

Can I sort and compare the Platinum Japan to do my own analysis?

To sort and compare the Platinum Japan financial metrics, please refer to the table above.

Has the Platinum Japan been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in Platinum Japan?

If you or your self managed super fund would like to invest in the Platinum Japan please contact via phone or via email .

How do I get in contact with the Platinum Japan?

If you would like to get in contact with the Platinum Japan manager, please call .

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Platinum Japan. All data and commentary for this fund is provided free of charge for our readers general information.

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Historical Performance Commentary

Performance Commentary - June 30, 2023

The Fund (C Class) returned 4.4% for the quarter.1

Buoyant market conditions assisted the Fund’s return, with the Japanese equity market rising a strong 15.6% over the quarter in local currency terms, as foreign investors netbought more than US$50 billion of Japanese equities for the calendar year to date,2 an amount not seen since the Abenomics boom in 2013 (see Fig. 1).

The foreign buying was triggered by the media attention following Warren Buff ett’s visit to Japan in April, where he met with the management of his sogo shosha (trading company) holdings. This drew attention to the major changes in corporate governance that have taken place over the last decade or so, which culminated in the call this year by the Tokyo Stock Exchange (TSE) for companies to publish detailed plans on improving their corporate value so as to achieve a trading valuation of greater than 1x their price-to-book value.3 The TSE’s move, together with increasing pressure from shareholders and a general sense of a shift in the zeitgeist, resulted in company after company announcing increased profit targets and much greater cash returns to shareholders. Early-mover global investors.

Performance Commentary - March 31, 2023

The Fund (C Class) delivered a solid 6.9% return during the quarter, boosted by general strength in the Japanese equity market.1

The rise in the broader market was primarily driven by a rebound in growth stocks, particularly in technology-related areas. Meanwhile, financials reversed much of their gains from the December quarter as the issues in the US banking system stoked recession fears and led to downward pressure on rates globally. This reduced pressure on the yen and thus makes it less likely the Bank of Japan will be forced to abandon its controversial yield curve control policy, which in turn reduced hopes of Japanese banks being able to invest their low-cost deposits at higher rates of return.

The issues in the US likely also caused investors to turn their eyes to the asset side of the balance sheets of Japanese financial institutions and to note their large holdings of low-yielding government bonds. The danger here is that should rates rise, the market value of these holdings will fall. These assets are not required to be marked-to-market unless sold, but if depositors withdraw funds in large enough numbers, capital positions can begin to look precarious as assets are sold to meet withdrawals, thus crystallising losses and stimulating more withdrawals and a disastrous feedback loop; exactly what happened with Silicon Valley Bank (SVB). This outcome seems much less likely in the Japanese context as the deposit base is diversified, whereas SVB’s clients were typically lossmaking, venture capital-funded corporates, which had account balances that were rapidly declining as the normal source of replenishment, the venture-funding market, had dried up. Nevertheless, the change in investor perceptions of this risk factor sent financials stocks, particularly regional bank stocks, lower. The Fund had minimal exposure to this area, so was only slightly aff ected.

Strong contributors to the Fund’s performance in the quarter included semiconductor equipment maker Tokyo Electron (+24% in the quarter) and silicon wafer producer Sumco (+13%), as well as memory chip makers SK Hynix (+18%) and Samsung Electronics (+16%). These stocks all rebounded in line with the broader technology sector.

Performance Commentary - December 31, 2022

Japanese equities rallied during the quarter, at first in line with other developed markets, then likely on news that China, Japan’s close neighbour and major trading partner, was exiting its zero-COVID policies, which has positive implications for the return of Chinese tourists and the demand for Japanese goods. The rally persisted even as the yen strengthened, until late in the quarter, when the Bank of Japan (BOJ) surprised the market by announcing it would increase its target band for the 10-year bond rate, causing the yen to strengthen further and equities to sell off . Overall, for the quarter, the combination of rising equities and a rebounding yen helped the Fund (C Class) deliver solid performance, returning 2.8% for the period.

Unfortunately, this was below the market’s return, due primarily to our currency positioning and low exposure to financial services stocks, which rallied due to the prospect of stronger profits as a result of higher interest rates. Regular readers may recall our discussion of yen weakness in the September quarterly report and our use of hedging to mitigate some of the eff ects of that move on investors in the Fund. By September, we viewed the yen as cheap and removed our hedging, with the decision aided by a form of backstop in terms of the expressed intention of the Japanese government to intervene in the currency market to prevent further rapid depreciation. That backstop was not tested rigorously because the pressure on the currency from an appreciating US dollar (USD) reversed as US bond yields fell on expectations of less aggressive rate increases in the face of cooling inflation. In November, we did move some currency exposure back to the Australian dollar (AUD) as we saw continued prospects for widening interest rate diff erentials that would make the AUD relatively more attractive to investors.

However, this has not yet played out as anticipated due to the Reserve Bank of Australia’s persistence with small 0.25% hikes at its November and December meetings, despite rampant inflation, as well as falling yields at the longer end of the AUD curve, which reduced the longer-term rate diff erential with the yen. These dynamics were further compounded by the BOJ’s decision near the end of the quarter.

Performance Commentary - September 30, 2022

Japanese stocks fell slightly in the quarter, having initially followed global markets higher before declining in the second half of the quarter.

The Fund (C Class) returned 3.1%, driven by the performance of several core holdings. The market shook off the shocking event of the assassination of former Prime Minister Abe, despite the potential longer-term implications of his absence possibly opening the door for a reversal of corporate governance reforms. Several members of our Japan team were in Tokyo on the day of his controversial state funeral, and were awed by the crowds that turned out to mourn his passing.

Near term, at least, his legacy seems likely to be respected, while it appears that Prime Minister Kishida is a politician who tries to sail with the winds rather than set a clear new course. This may make the current path the one of least resistance. Currency fluctuations were again a major influence on markets, with the yen briefly crossing 145 to the US dollar (USD). The rapid pace of depreciation forced a reaction from the Ministry of Finance (MoF) and Bank of Japan (BoJ), with the latter intervening in the currency market, selling almost US$20 billion. Japan has huge USD reserves, amounting to almost US$1.3 trillion, so retains significant scope to intervene further. That said, if it is required to significantly reduce its USD bond holdings, this could put further upward pressure on US interest rates, with potentially sizeable implications for global liquidity. It is not that the authorities believe a weak yen is bad per se, but more that the rapid pace of depreciation creates instability. In the words of the BoJ Governor Kuroda, it…

Performance Commentary - June 30, 2022

The Fund (C Class) returned -5.6% for the quarter and -7.7% for the year.¹

Japan’s stock market (-4% in local currency terms) did not escape unscathed from the equity market pain felt in the Western hemisphere, but fared considerably better than its US (-17%) and European (-9%) counterparts,² helped in part by the weakness in the yen and the ongoing loose monetary policy of the Bank of Japan (BOJ).

The Fund saw strong performance from a selection of stocks driven by idiosyncratic factors. Ship Healthcare (+21%) rebounded as investors warmed to its respectable new mid-term plan, driven by government policy to reduce hospital numbers via consolidation and reconstruction, which is benefi cial to Ship’s consulting and medical equipment supply business. Technology systems integrator Fuji Soft rallied 26% as an activist investor increased its stake to more than 20% after its shareholder proposals were rejected at the Annual General Meeting in March, and bathroom fi xtures and window sash manufacturer Lixil gained 11% with a decline in the price of aluminium, a key input.

Our selective short positions against a number of very overvalued and/or challenged businesses contributed 1.1% to the Fund’s return in the quarter.

Detractors from performance included semiconductor the increasing likelihood that major Russian producer VSMPO’s products will be excluded from high-grade

aerospace applications. We exited our position in Oracle Japan, as we assessed the competitive position of Oracle’s growth engine, the enterprise resource planning software business, to be much less robust in Japan than elsewhere.

equipment maker Tokyo Electron (-30%) and semiconductor wafer manufacturer SUMCO (-13%), as the outlook for semiconductor demand weakened. Doosan Bobcat, owner of the Bobcat small earth-mover brand, declined 26% due to its exposure to a weakening US housing cycle.

Changes to the Portfolio

We made only a few minor tweaks to the portfolio during the quarter, adding to our positions in Fuji Soft and elevator maker Fujitec, as activist actions appeared likely to gain more ground with both companies. We also increased our stake in Toho Titanium, as the outlook for its business improved with the increasing likelihood that major Russian producer VSMPO’s products will be excluded from high-grade

aerospace applications. We exited our position in Oracle Japan, as we assessed the competitive position of Oracle’s growth engine, the enterprise resource planning software business, to be much less robust in Japan than elsewhere.

Performance Commentary - March 31, 2022

Japanese equity markets continued their decline in the first quarter of 2022, falling -9.6% in Australian dollar (AUD) terms. The pockets of strength in the market were positively exposed to either the upward move in global interest rates (banks, insurers) or commodity prices (trading companies, energy producers/explorers/services, materials). The combination of increasing interest rate differentials with the US and the implications for Japan’s trade balance of higher prices for its commodity inputs caused the yen to weaken. From 115 to the US dollar (USD) at the start of the quarter, it touched 125 briefly, before settling back in the 121-122 region. The Fund benefited from the yen weakness as we had shifted our currency exposure into USD last quarter and at the beginning of this quarter, leaving us with around 25% of the Fund exposed to the yen at the time it resumed its downward march.

Later during the quarter, we moved some of that exposure to AUD, as inflating resource prices implied more buoyant times for the AUD on a relative basis. Overall for the quarter, the Fund (C Class) returned -6.4% with a positive contribution of 2.6% as a result of currency positioning. A weaker yen typically supports the Japanese economy and stock prices given its export orientation, however, the rising costs for Japanese companies implied by the current scenario have so far more than offset any gains from the weakening currency.

A number of our positions were hurt by the prospect of cost increases and broader supply chain issues, including household fixtures manufacturer Lixil (-25% over the quarter), miniature ball-bearings producer MinebeaMitsumi (-17%), and sensor provider Nippon Ceramic (-13%). Semiconductor chip shortages continue to have wide-ranging impacts up and down the supply chain. Much like Minebea and Nicera’s automotive customers have not been able to produce the vehicles demanded, Ship Healthcare’s (-27%) medical equipment production and sourcing faced signifi cant disruption, leading the company to downgrade its full-year profi t outlook.

Performance Commentary - June 30, 2021

The Fund (C Class) returned 0.8% over the quarter and 18.3% over the year.

The Japanese equity market was broadly flat for the quarter in Australian dollar (AUD) terms, as the cyclical rally in the stocks of beneficiaries of stronger global growth and higher interest rates took a time-out, with the current elevated levels of consumer price inflation increasingly being viewed as transitory by market participants (please see our Macro Overview). Given the Fund’s exposure to growth cyclicals and deep value plays, it was pleasing that the Fund delivered a similar return to the broader market.

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