Key Facts
• In 2025, the Carrera Japan Small-Cap Equity Fund won the top award in the Japan Small-Cap category of the Diamond Zai NISA Investment Trust Grand Prix.
• The fund focuses exclusively on small-cap stocks with a market capitalization under 100 billion yen at the time of investment.
• Stocks are sold when their market value doubles to around 200 billion yen.
• The fund prioritizes undervalued stocks, targeting a price-to-earnings ratio (PER) below 10 and a price-to-book ratio (PBR) below 1.
• Despite a challenging environment for small-cap stocks in 2024, the fund achieved strong performance.
• The fund manager, Ryuzo Kojima, emphasizes stocks overlooked by analysts and institutional investors.
• Key investment themes include green transformation (GX) and domestic capital investment resurgence.
• The fund’s portfolio includes niche sectors like shipbuilding and manufacturing.
• The fund’s maximum drawdown is 9.0%, significantly lower than the 21.9% average for small-cap funds.
• The Tokyo Stock Exchange reforms since 2023 are expected to create opportunities for small-cap stocks.
Summary
The Carrera Japan Small-Cap Equity Fund, awarded the top prize in the 2025 Diamond Zai NISA Investment Trust Grand Prix, has gained attention for its unique focus on small-cap stocks under 100 billion yen. Managed by Ryuzo Kojima, the fund targets undervalued stocks with high growth potential, often overlooked by analysts. Key strategies include leveraging niche markets, such as shipbuilding, and aligning with trends like green transformation and domestic capital investment. Despite a tough market for small caps in 2024, the fund’s disciplined approach delivered strong results, with a maximum drawdown of just 9.0%. Tokyo Stock Exchange reforms are expected to further boost small-cap opportunities, making this fund a standout performer in its category.
