Japanese equities slumped in the three-month period to the end of September as concerns about a slowdown in China reverberated across financial markets. The quarter had begun on a positive note with Japanese stocks rising in July, aided by solid corporate earnings reports, unprecedented monetary stimulus by the Bank of Japan, a weaker yen, and lower oil prices. The market became more volatile in the latter half of August, as Japanese equities tracked a spiraling decent in Chinese stocks. Large-caps led the retreat, followed by mid- and then small-caps. Among industry segments, iron and steel and mining and machinery saw the greatest weakness as expectations for global economic growth were revised lower on the back of China's slowdown, and commodity prices plunged to multiyear lows. Only air transportation and construction finished in positive territory, albeit with modest gains.
The Japan Fund returned −9.29% in the quarter compared with −10.89% for the TOPIX Index and −11.00% for the Lipper Japanese Funds Average. For the 12 months ended September 30, 2015, the fund returned −0.11% versus −0.69% for the TOPIX Index and 0.24% for the Lipper Japanese Funds Average. The fund's average annual total returns were −0.11%, 7.12%, and 0.57% for the 1-, 5-, and 10-year periods, respectively, as of September 30, 2015. The fund's expense ratio was 1.05% as of its fiscal year ended October 31, 2014. Continue Reading »