JOF - JEQ: Probably Due A Pause, After A Good Run
2025-05-27 20:14:33 ET
Summary
- abrdn Japan Equity Fund, which has a dismal track record in covering Japanese equities over three decades, has gotten off to a strong start in 2025.
- JEQ's current distribution profile is not very attractive, while its discount to NAV has narrowed down substantially.
- JEQ which is largely dominated by large-caps, looks rather pricey compared to the small-cap oriented CEF JOF.
- Conditions for Japanese industrials, which dominate this portfolio, don't look very encouraging.
- After witnessing strong momentum, following a breakout from a three-year trading range, JEQ has now entered an old congestion zone.
A Solid Start To The Year
The abrdn Japan Equity Fund, Inc. ( JEQ ), a close-ended fund [CEF] that offers exposure to over 80 stocks from Japan ( over 60% of which comprises Japanese giant and large-caps) appears to be in fine form this year. Even though we haven’t even approached the half-way mark of 2025, JEQ, on a price basis, is already up by 19%, which is comfortably more than what it had witnessed “annually” for each of the 4 preceding years! Note also that on a YTD price basis, it is also currently outperforming other products from this category by around 3.5x. The performance of JEQ this year may likely result in quite a few stakeholders feeling like they are finally getting good bang for buck, as they have to shed out quite a pricey net expense ratio of 1.18% (as of April 2025) to own this product (more on the performance later)...
JEQ: Probably Due A Pause, After A Good Run