uploads///Portfolio Breakdown of the IJIAX

Changes to the IJIAX Portfolio: How They Reflect the Index


May. 13 2016, Updated 1:57 p.m. ET

IJIAX: An overview

Unlike other Japan-focused mutual funds in this review, the Voya Japan TOPIX Index Portfolio – Class A (IJIAX) is an index fund. Actively managed mutual funds can either track their benchmark index or deviate from it, depending on market conditions and management style. An index fund tracks its benchmark. This is apparent in its objective, which says 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.”

The fund is passively managed and aims to track its underlying index as closely as possible. It’s not necessary for it to always hold all the securities in the index. The fund can also invest in index futures and other derivatives as a substitute for the index.

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The fund is invested in a staggering 1,453 stocks as of March 2016, the most among all its peers in this review. At the end of April 2016, the fund had assets under management worth $319.4 million. As of the September portfolio, its equity holdings included Advantest (ATE), Canon (CAJ), Kyocera (KYO), Sumitomo (SSUMY), and Mitsui & Co. (MITSY).

Portfolio changes in IJIAX

Since IJIAX is index-tracking and not actively managed, its portfolio composition will give you a brief overview of how the portfolio of TOPIX (Tokyo Price Index) has changed in the past few months.

Industrials, consumer discretionary, and financials form the core of IJIAX’s portfolio. Combined, they account for 57% of the fund’s portfolio. Information technology is the only other sector that forms more than a tenth of the fund’s assets. Since the fund passively tracks its benchmark index, its composition changes only when the index witnesses a change.

The underlying index has more exposure to consumer staples than it had a year ago. The same is the case with healthcare and telecom services stocks. On the other hand, consumer discretionary and financials stocks have seen a decline in weight over the period.

In the next article, let’s look at what has contributed to IJIAX’s performance in the first trimester of 2016.


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