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UniversalSelect: Sompo
Marketing Communication
Date:
23. June 2025
Fund analysis:Sompo Japan Small Cap Value Equity UI
Sompo Asset Management Co. Ltd was established in 1986 and is part of Japan’s Sompo Holdings Inc. The company is based in Tokyo and has representative offices in London and New York. Its 198 employees, including 61 investment specialists, manage around 28.5 billion US dollars in assets. Of these, some 6.6 billion US dollars are invested in strategies targeting Japanese equities, one of Sompo Asset Management’s core areas of expertise.(As of May 2025)
The fund pursues Sompo's Japan Value Equity Small Cap Strategy, first introduced 2007. The strategy focuses on Japanese small caps listed in the Russell/Nomura Small Cap Index, which serves as the fund’s benchmark. The portfolio is constructed exclusively bottom up and follows a value-driven investment strategy.
Investment process:
The fund’s investment universe includes around 350 to 400 equities from the Russell/Nomura Small Cap Index, each with a market capitalisation of at least 20 billion Japanese yen and a daily trading volume of at least 20 million JPY. Analysts begin by conducting a fundamental analysis of the relevant companies, focusing in particular on their industry and market positioning. Next, they carry out a valuation analysis to determine the intrinsic value of each company and the alpha gap — the difference between the current share price and its intrinsic value. Portfolio construction is bottom up, based on the ranking of alpha potential, analyst estimates and risk management principles. Shigeyoshi Fujiwara, the lead fund manager, makes the ultimate decision on which equities are selected.Management:
Shigeyoshi Fujiwara joined Sompo Asset Management in 2006, bringing with him 18 years of industry experience. Besides managing the fund, he also serves as an analyst for precision engineering, other manufacturing industries and the banking sector. The investment team comprises 15 specialists who carry out fundamental company analysis and visit around 500 companies a year. The team is also supported by three sustainability experts.Portfolio:
The fund pursues an active strategy with a defined tracking error target of between two to six percent, giving managers considerable flexibility for targeted positioning in individual equities. The maximum weighting of any single share is five per cent, and the portfolio comprises between 70 to 120 titles (currently 82). Compared with the benchmark, the value-driven investment approach results in significantly lower valuation metrics — in terms of price-to-earnings and price-to-book ratios. The portfolio is currently significantly overweight in the financial and cyclical consumer sectors, which together account for almost half of the portfolio. The sector allocation shifts dynamically over time based on the companies’ relative investment appeal. Annual portfolio turnover in the past typically averaged 60 per cent.
Summary:
Sompo Asset Management Co. Ltd has a strong track record in Japanese equity investment. Fund manager Shigeyoshi Fujiwara has overseen the fund since its inception, supported by a large team of experienced portfolio managers and analysts specialised in Japanese equities. The proven, value-driven investment process allows Fujiwara ample room to shape the portfolio according to his investment convictions. The fund portfolio deviates significantly from its benchmark and is clearly focused on individual stocks and sectors. The strategy has an excellent overall track record.
Disclaimer
© 2025. All rights reserved. This publication is for marketing purposes only. The information provided should not be taken as recommendation or advice. All information is based on publicly available sources which we consider to be reliable. We cannot guarantee the accuracy or completeness of the information, and no statement in this publication is to be understood as such a guarantee. The opinions expressed in this publication are subject to change without notice. Information on historical performance do not allow conclusions about or otherwise guarantee future performance. Investment decisions should only be made on the basis of the current sales documents (Key Information Document, Prospectus (including the supplement for the relevant fund), which also contains an overview of the relevant material contractual terms and conditions or terms of investment, and, where published, the latest annual and semi-annual reports) of the fund. You can find sales documents in English and the Key Information Document also in German on the internet at www.fondsfinder.universal-investment.com, or from the management company Universal-Investment Ireland Fund Management Limited (Kilmore House, Spencer Dock, North Wall Quay, Dublin 1, D01 YE64). All documents are free of charge. When deciding to invest in the advertised fund, the investor should also take into account the sustainability aspects regarding the characteristics or objectives of the advertised fund.
Information on the sustainability aspects of the fund can be found in the Universal Investment fund finder https://fondsfinder.universal-investment.com/en under ‘Sustainability-related disclosures’ of the respective fund. This does not constitute an offer or invitation to subscribe for units or shares of an investment fund. The information presented should not be considered reliable in this sense, as it is incomplete with regard to the possible interpretation as a subscription offer and may still be subject to change. A summary of your investor rights can be found at https://www.universal-investment.com/-/media/Compliance/PDF/Ireland/Investor-rights_UII_EN_08_22.pdf. In addition, we would like to point out that Universal-Investment Ireland Fund Management Limited may, in the case of funds for which it has made arrangements as management company for the distribution of shares or units in a fund in EU member states, decide to cancel these arrangements in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU, i.e. in particular by making a blanket offer to repurchase or redeem all corresponding shares or units held by investors in the relevant member state.
Information on the sustainability aspects of the fund can be found in the Universal Investment fund finder https://fondsfinder.universal-investment.com/en under ‘Sustainability-related disclosures’ of the respective fund. This does not constitute an offer or invitation to subscribe for units or shares of an investment fund. The information presented should not be considered reliable in this sense, as it is incomplete with regard to the possible interpretation as a subscription offer and may still be subject to change. A summary of your investor rights can be found at https://www.universal-investment.com/-/media/Compliance/PDF/Ireland/Investor-rights_UII_EN_08_22.pdf. In addition, we would like to point out that Universal-Investment Ireland Fund Management Limited may, in the case of funds for which it has made arrangements as management company for the distribution of shares or units in a fund in EU member states, decide to cancel these arrangements in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU, i.e. in particular by making a blanket offer to repurchase or redeem all corresponding shares or units held by investors in the relevant member state.