uploads///Portfolio Breakdown of the IJIAX

A Portfolio Scan of the Voya Japan TOPIX Index Portfolio in 2015


Jan. 29 2016, Updated 4:54 p.m. ET

Voya Japan TOPIX Index Portfolio

Unlike other Japan-focused mutual funds in this review, the Voya Japan TOPIX Index Portfolio – Class A (IJIAX) is an index fund. While actively managed mutual funds can either track their benchmark index or deviate from it, depending on market conditions and management style, an index fund necessarily tracks its benchmark. This is also visible in its objective, which read, “The Portfolio seeks investment results (before fees and expenses) that correspond to the total return (which includes capital appreciation and income) of the Tokyo Stock Price Index.”

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Although Voya Japan TOPIX Index Portfolio – Class A (IJIAX) is passively managed and aims to track its underlying index as closely as possible, it is not necessary for it to always hold all the securities in the index. The fund can also invest into index futures and other derivatives as a substitute for the index.

IJIAX is invested in a staggering 1,448 stocks as of September 2015—the most among all its peers in this review. At the end of December, the fund had assets under management worth $386.53 million. As of its September portfolio, its equity holdings included Toyota Motor Corporation (TM), Nippon Telegraph and Telephone Corporation (NTT), Fanuc Corporation (FANUY), Nissan Motor Co. Ltd. (NSANY), and NTT DOCOMO, Inc. (DCM), comprising 8.3% of the fund’s portfolio.

Historical portfolios

For this analysis, we will consider the fund’s holdings as of September 2015, which is the latest available sectoral breakdown. The holdings after September reflect the valuation-driven changes to the portfolio, not the actual holding. The fund makes complete portfolios available once per quarter.

Because the index-tracking fund is not actively managed, its portfolio composition can give you a brief overview of how the portfolio of the index has looked over the past few months.

Consumer discretionary, industrials, and financials form the core of IJIAX’s portfolio. Combined, they account for 58% of the fund’s portfolio. Because the fund passively tracks its benchmark index, its composition changes only when the index witnesses a change. Except for its cash position, all other sectoral allocation is according to the index. So, the graph above looks quite consistent across periods in terms of portfolio allocation.

In the next article, let’s look at how IJIAX has performed in 2015.


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