Best Japanese Equity Funds

• This article highlights 10 Japanese equity funds that have ranked consistently among the strongest performers in the IA Japan sector.

• From an analysis of 98 Japanese equity funds, only 16 achieved a 4 or 5-star Yodelar Rating.

• Of those analysed, 63 funds delivered below-average returns across the same 1, 3 and 5-year timeframes.

• The WS Morant Wright Japan fund achieved 32.22% growth over the past year, ranking 1st in the IA Japan sector.

• The WS Morant Wright Nippon Yield fund delivered the strongest five-year growth of 128.57%, well ahead of the IA Japan sector average of 35.51%.

Japanese equity funds remain a widely used option for UK investors seeking exposure beyond domestic markets. The IA Japan sector provides access to a broad range of listed Japanese companies and currently holds around £29.1bn in assets under management.

In this review, we analyse the performance, sector ranking and Yodelar Rating of 98 funds classified within the IA Japan sector over the past 1, 3 and 5 years. From this analysis, we highlight 10 Japanese equity funds that achieved consistently high sector rankings across the periods analysed.

This article also links to the full Japanese equity funds performance report, which includes 1, 3 and 5‑year growth figures, sector rankings and Yodelar Ratings for all 98 IA Japan funds.

Japanese Equity Funds Performance Summary

We conducted a detailed analysis of 98 Japanese equity funds, assessing their performance and sector rankings over the past 1, 3 and 5 years. Each fund was assigned a Yodelar performance rating based on how it compared with peers within the IA Japan sector.

Only 16 funds achieved a 4 or 5-star rating, demonstrating a consistent ability to outperform their peers across all timeframes.

In contrast, 63 funds - more than 64% of those analysed - received a 1 or 2-star rating, reflecting persistently below-average returns.

These results highlight the wide dispersion of performance within the Japanese equity sector and underline the importance of careful fund selection when investing in this market.

10 Top Performing Japanese Equity Funds

The table below highlights 10 Japanese equity funds that delivered more consistent results when compared with their sector average. Inclusion is based on sector rankings across 1, 3 and 5 years.

Each of the featured funds ranked above the sector average across the periods analysed, with several consistently among the higher-ranking funds within the IA Japan sector.

1. WS Morant Wright Japan Fund

TWith over £920 million in assets, the WS Morant Wright Japan fund has ranked consistently among the higher-performing Japanese equity funds across the periods analysed. Over 1 year, it returned 32.22%, ranking 1st in the sector, compared with a sector average of 18.82%. Over 3 years, returns of 88.48% ranked 3rd out of 91 funds, versus a sector average of 41.75%. Over 5 years, the fund delivered 110.63%, ranking 4th out of 84, compared with a sector average of 35.51%.

2. WS Morant Wright Nippon Yield Fund

Managing around £1 billion in assets, the WS Morant Wright Nippon Yield fund has delivered standout performance across all measured periods within the IA Japan sector. Over the past year, it returned 32.08%, placing 2nd out of 98 funds. Over three years, returns of 86.05% ranked 4th out of 91, comfortably ahead of the sector average of 41.75%. Its five-year return of 128.53% ranked 1st out of 84, making it the top-performing fund in the sector over that period, compared with a sector average of 35.51%.

3. Fidelity Japan Fund

The Fidelity Japan fund targets long-term capital growth over five years or more by investing principally in Japanese equities, with at least 70% of the portfolio allocated to companies based in, operating in, or listed in Japan. 

This approach has delivered competitive performance across the analysed periods. Over the past year, it returned 31.78%, ranking 3rd out of 98 funds. Over three years, it delivered returns of 61.41%, placing 7th out of 91, ahead of the sector average of 41.75%. Its five-year return of 80.04% ranked 7th out of 84, compared with a sector average of 35.51%.

4. JK Japan Fund

The JK Japan Fund aims to deliver long-term growth by investing in a focused portfolio of Japanese companies that the manager believes are undervalued and possess strong business franchises and growth potential. 

The fund has delivered impressive performance across different time periods. Over the past year, it returned 31.13%, ranking 5th out of 98 funds. Over three years, it achieved highest returns of 110.97%, placing it 1st out of 91 funds and making it the top fund in the sector over that period. Its five-year return of 119.79% ranked 3rd out of 84. This performance positioned it among the best-performing Japanese equity funds.

5. Polar Capital Japan Value Fund

The Polar Capital Japan Value fund has produced solid and consistent performance over time. Over the last year, it returned 27.05%, placing it 8th within its peer group. Over three years, returns of 55.67% saw it rank 12th out of 91 funds, while its five-year return of 75.46% was more than twice the sector average of 35.51%, ranking 9th out of 84 funds.

6. Man Japan Core Alpha C Professional Fund

With around £2.71 billion in assets, the Man Japan Core Alpha C Professional fund has delivered consistent performance across key timeframes within the IA Japan sector. Over the past year, it returned 26.83%, placing 9th out of 98 funds. Over three years, returns of 62.51% secured 5th place out of 91, ahead of the sector average of 41.75%. Its five-year return of 123.08% ranked 2nd out of 84, significantly surpassing the sector average of 35.51%.

7. M&G Japan Fund

The M&G Japan Fund aims to deliver higher returns than the MSCI Japan Index over a five year period. The index tracks the performance of large and mid sized companies listed in Japan.

With around £4.57 billion in assets, the fund is among the largest in the sector and has delivered solid performance across key timeframes. Over the past year, it returned 23.85%, ranking 16th out of 98 funds. Over three years, it produced returns of 56.37%, placing 11th out of 91. Its five-year return of 91.00% ranked 5th out of 84, more than double the sector average.

8. Quilter Investors Japanese Equity Fund

The Quilter Investors Japanese Equity fund has delivered competitive returns across all measured periods within the IA Japan sector. Over the past 12 months, it returned 23.45%, ranking 19th out of 98 funds. Over three years, it achieved a cumulative return of 55.37%, placing 13th out of 91. Its five-year return of 70.14% ranked 10th out of 84 funds, comfortably ahead of the sector average of 35.51%.

9. abrdn Japan Equity Enhanced Index

The abrdn Japan Equity Enhanced Index fund targets long-term growth over five years or more by investing in Japanese equities that form part of the MSCI Japan Index. It follows an enhanced index approach, seeking to track the index closely while aiming for modest outperformance through controlled, systematic active positioning.

This strategy has produced competitive results across multiple timeframes. Over the past year, the fund returned 19.68%, placing it within the top half of its sector. Over three years, it delivered returns of 51.04%, ranking 15th out of 91 funds. Its five-year return of 46.84% ranked 15th out of 84, comfortably ahead of the sector average of 35.51%.

10. CT Japan Fund

The CT Japan fund is managed by Columbia Threadneedle and it has delivered solid performance across the periods analysed. Over the past year, it returned 19.63%, ranking 34th out of 98 funds. Over three years, it delivered returns of 57.99%, placing 8th out of 91. Its five-year return of 43.65% ranked 17th out of 84, also ahead of the sector average of 35.51%.

Conclusion

Our analysis of the IA Japan sector shows a wide spread of performance between funds classified within the same sector. Of the 98 funds analysed, only 16 achieved a 4 or 5-star Yodelar Rating based on consistent performance over the 1, 3 and 5-year periods analysed, while 63 funds (64.3%) received a 1 or 2-star rating, indicating returns below the sector average across multiple periods.

These findings reinforce the importance of careful fund selection. Strong sector performance does not guarantee strong fund results, and performance can vary significantly between funds classified within the same sector.

The Importance of Professional Portfolio Oversight

While performance data highlights clear differences between higher- and lower-ranking funds, it does not show how funds interact within a portfolio. Many portfolios hold more than one fund in the same sector, and funds within the IA Japan sector can share similar exposures through common holdings and sector biases.

Where portfolios contain multiple Japan funds with similar exposures, this can lead to duplication rather than diversification. In these cases, changes affecting a small number of widely held companies or themes can impact several funds at the same time.

This highlights the importance of reviewing diversification at portfolio level. Holding more than one fund in the same sector does not automatically reduce risk if those funds share similar holdings or strategies.

For investors who want to assess how their holdings compare, a portfolio analysis can help review each fund against its sector average across multiple periods, identify duplication, and assess charges. 

Past performance is not a guide to future returns. This article is based on historic analysis and does not constitute personal advice.