uploads///Portfolio Breakdown of the BIAJX

Changes to the BIAJX Portfolio So Far in 2016

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May. 13 2016, Published 12:55 p.m. ET

BIAJX: A fund overview

The Brown Advisory – WMC Japan Alpha Opportunities Fund (BIAJX) “seeks to achieve total return by investing principally in equity securities issued by companies established or operating in Japan, while limiting exposure to fluctuations between the value of the Japanese yen and the U.S. dollar.” The fund states that at least half of its exposure to the Japanese yen is hedged at all times.

The fund doesn’t target any specific segment in terms of market capitalization and intends to be benchmark-agnostic. What this means is that it doesn’t intend to replicate its benchmark. The fund’s performance is benchmarked to the Topix (Tokyo Stock Price Index) Total Return U.S. Dollar Hedged Index. A comparison of its portfolio with this benchmark shows a significant difference between percentage weight allocated to the consumer staples, industrials, and information technology sectors.

The fund is quite diversified with 234 holdings as of April 2016. It was managing assets worth $1.9 billion. As of April, its equity holdings included Honda Motor (HMC), Mizuho Financial Group (MFG), Canon (CAJ), Konami (KNM), and Panasonic (PCRFY), which comprise 4.5% of the fund’s portfolio.

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Portfolio changes in BIAJX

Consumer discretionary, information technology, and financials form the core of the BIAJX portfolio. These three sectors combine to form more than half of the fund’s assets. Apart from these three, industrials is the only sector whose portfolio weight reads in double digits. The fund isn’t invested in the utilities sector. Fund managers exited the sector in mid-2015.

Compared to a year ago, consumer discretionary, consumer staples, healthcare, information technology, and telecom services have seen their portions increase. Among the consumer-related sectors, exposure to staples has seen a much higher percentage-wise increase than discretionary stocks. Although exposure to discretionary stocks is higher than a year ago, it’s lower than it was intra-year. The same is true for telecom services stocks.

In the one-year period until April 2016, financials and materials stocks have seen a decline in their shares.

With this portfolio positioning, how has BIAJX fared in the first trimester of 2016, and why has it performed this way? Let’s look at that in the next article.

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