Key Facts
The Diamond Zai NISA Investment Trust Grand Prix 2025 recognized top-performing active investment trusts eligible under the new NISA framework. The evaluation was based on three criteria: growth rate, resilience during market downturns, and consistent performance. Among the seven categories, the Japanese Small and Mid-Cap Stocks Division highlighted two standout funds that excelled despite challenging market conditions.
1. Carrera Japan Small-Cap Equity Fund
Managed by Carrera Asset Management, this fund focuses exclusively on Japanese stocks with a market capitalization below 200 billion yen. It targets undervalued stocks with a price-to-earnings ratio (PER) under 10 and a price-to-book ratio (PBR) below 1. The portfolio includes niche-leading companies with stable business models and predictable earnings.
Key investment themes include:
– Green Transformation (GX): Transitioning from fossil fuels to renewable energy sources like solar, wind, and biomass. The fund’s top holdings include shipbuilding companies, benefiting from the shift to cleaner fuels such as natural gas and hydrogen.
– Capital Investment: Companies involved in reshoring production facilities to Japan post-pandemic. Notable holdings include Hirata Corporation and Seiko Electric Manufacturing Co., which are well-positioned to capitalize on this trend.
In 2024, the fund outperformed its benchmark by 9.3 percentage points, achieving a 16.5% growth rate. It also demonstrated strong downside protection, with a maximum drawdown of just -9.0%, less than half the average for small-cap stocks. Over three and five years, it maintained top-tier performance, earning high scores for stability.
2. Eastspring Japan Small-Cap Value Equity Fund
Operated by Eastspring Investments, this fund earned its second consecutive award by identifying deeply undervalued stocks. It focuses on companies with low PBRs compared to historical or industry averages, ensuring significant upside potential. The portfolio is diversified across sectors, with notable allocations to chemicals (20%), electrical equipment (14%), and machinery (13%).
From 2021 onward, the fund consistently delivered strong results, with a five-year return of 84.8%, outperforming the small-cap index by 19.2 percentage points. While its downside resilience scored moderately at 60.9 points, its long-term stability earned perfect marks, supported by four consecutive years of top-tier performance.
Both funds exemplify strategic management and resilience, making them standout choices for investors seeking exposure to Japanese small-cap equities.
Summary
The Diamond Zai NISA Investment Trust Grand Prix 2025 honored two standout funds in the Japanese Small and Mid-Cap Stocks Division for their exceptional performance under challenging market conditions. The evaluation focused on growth, resilience during downturns, and consistent results.
Carrera Japan Small-Cap Equity Fund, managed by Carrera Asset Management, targets Japanese stocks with market capitalizations under 200 billion yen. It emphasizes undervalued stocks with a price-to-earnings ratio below 10 and a price-to-book ratio under 1. Key investment themes include the transition to renewable energy and reshoring production to Japan. In 2024, the fund outperformed its benchmark by 9.3 percentage points, achieving a 16.5% growth rate with a maximum drawdown of just -9.0%.
Eastspring Japan Small-Cap Value Equity Fund, operated by Eastspring Investments, focuses on deeply undervalued stocks with significant upside potential. Its portfolio spans chemicals, electrical equipment, and machinery. From 2021, the fund delivered a five-year return of 84.8%, outperforming the small-cap index by 19.2 percentage points. It earned perfect scores for long-term stability, supported by four consecutive years of top-tier performance.
Both funds exemplify strategic management and resilience, making them strong options for investors seeking exposure to Japanese small-cap equities.
