Japanese Value Equity Strategy

Japanese Value Equity Strategy

Japanese Value Equity Strategy


The Japanese Value Equity Strategy seeks long-term capital appreciation by investing in Japanese stocks that have market capitalizations of greater than US $400 million. To achieve its objective, the strategy adopts a bottom-up approach to identify undervalued, quality business franchises that trade at a substantial discount to their long-term intrinsic value.

Investment Approach

The team believes that the broad Japanese equity universe is inefficiently valued. Over the long term, however, the team believes that the price of an asset will revert to its true intrinsic value, thereby offering investors in undervalued stocks the potential opportunity for superior returns.

A highly-experienced investment team

The team’s 27 investment professionals have an average 14 years investment experience.

High conviction approach

Portfolios are conviction based; those stocks we believe have the greatest potential make up a larger part of the portfolio.

Risk-aware portfolio construction

Final portfolio weights will take in to consideration the total risk of the portfolio in addition to the index weights and conviction levels for individual stocks.

Investment Process

Approximately 1000 stocks are pre-selected from all listed Japanese stocks based on liquidity and capitalization.

Quantitative Screening

The team selects ‘Research Targets’ based on a rich-cheap screen.

Profit Cycle Analysis

The team then performs a combination of fundamental analysis and interaction with company management identifies companies with an improving Profit Cycle outlook.

Portfolio Construction

The team follows a discretionary process, in which the lead portfolio manager weights the merits of investment targets along with overall portfolio risk, as assessed by Barra.

Portfolio Analysis

Finally the team assembles feedback of performance measures and factor analysis.

Strategy_Japanese Equity_Japanese Equity Strategy
Portfolio Manager  
Katsushi Ishikawa
Japanese Equity Team
18 years industry experience

Effective June 29, 2023, the Japanese Equity Strategy was renamed to the Japanese Value Equity strategy.  


Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes.

There is no assurance that a portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the portfolio will decline. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this portfolio. Please be aware that this portfolio may be subject to certain additional risks.

In general, equities securities’ values also fluctuate in response to activities specific to a company.

Investments in foreign markets entail special risks such as currency, political, economic, and market risks.

Stocks of small capitalization companies entail special risks, such as limited product lines, markets, and financial resources, and greater market volatility than securities of larger, more-established companies.

Investments may be in a variety of currencies and therefore changes in rates of exchange between currencies may cause the value of investments to decrease or increase. Furthermore, the value of investments may be adversely affected by fluctuations in exchange rates between the investor’s reference currency and the base currency of the investments.

Derivative instruments can be illiquid, may disproportionately increase losses and may have a potentially large negative impact on the portfolio’s performance.

Strategies that specialize in a particular region or market sector (concentration risk) are more risky than those which hold a very broad spread of investments. Where strategy concentration is in one sector it is subject to greater risk and volatility than other strategies that are more diversified and its value may be more substantially affected by economic events in a particular industry.

This communication is only intended for and will be only distributed to persons resident in jurisdictions where such distribution or availability would not be contrary to local laws or regulations.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Past performance is no guarantee of future results.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required. For important information about the investment manager, please refer to Form ADV Part 2.

Any views and opinions provided are those of the portfolio management team and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

All information provided has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.


The MSCI Japan Index is a free-floated adjusted market capitalization weighted index that is designed to track the equity market performance of Japanese securities listed on the Tokyo Stock Exchange, Osaka Stock Exchange, JASDAQ and Nagoya Stock Exchange. The MSCI Japan Index is constructed based on the MSCI Global Investable Market Indices Methodology, targeting a free-float market capitalization coverage of 85%.

The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.


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