We reduced our overweight in the IT and services sector by scaling back our holding in Benefit One (TSE:2412), one of Japan’s leading providers of employee benefit services. The stock has been the best-performing HR-service sector name over the past several years, and we trimmed our holding as the valuation rose. While topline growth should accelerate, the pace of margin expansion is likely to slow now that the core business enjoys operating profit margins of close to 35%.
From T. Rowe Price Japan Fund (Trades, Portfolio)'s semi-annual 2019 shareholder letter.
