Neuberger launches UCITS Japan Equity Fund to capture governance-driven re-rating
30 JUL, 2026
By Joanna Piwko from RankiaPro Europe
Neuberger, an employee-owned, independent asset manager, has launched the Neuberger Japan Equity Fund, a new UCITS vehicle managed by the Tokyo-based Japanese equity team led by Keita Kubota. The team has run the underlying strategy since January 2021 and brings over 20 years of collective experience investing in Japanese equities.
Strategy and portfolio construction
The fund follows a bottom-up approach targeting a concentrated portfolio of 35 to 65 high-quality Japanese companies spanning the full market-cap spectrum. Stock selection is guided by a proprietary four-pillar scoring model assessing fundamentals, valuation, sustainability and engagement potential, aimed at identifying undervalued companies led by forward-looking management teams pursuing sustainable long-term growth.
A valuation gap still closing
Many of the companies in focus are benefiting from global megatrends, yet continue to trade at a discount to international peers — a gap the manager attributes to weaker corporate governance, inefficient balance sheet management and inconsistent disclosure. Neuberger argues that ongoing reforms and a shifting economic paradigm are addressing these issues, helping narrow the valuation discount over time.
Japan's equity market has delivered 18 strong months, with international investors watching as the region moves past its so-called lost decades of deflation. The most interesting part of this opportunity is still to come. Prime Minister Sanae Takaichi's growth-focused, stable government is in place, profit momentum is broadening, governance reform is becoming a direct driver of returns, and capital flows remain well below prior-cycle peaks. An all-cap approach is uniquely positioned to capture this transformation, offering access not only to well-covered large-cap leaders but also to the dynamic, significantly less-analysed mid- and small-cap segments, where reform adoption is earlier-stage, informational inefficiencies persist and re-rating potential is greater.
Keita Kubota, Senior Portfolio Manager and Head of Japanese Equities, Neuberger
José Cosío, Head of Global Intermediary Business (ex-US) at Neuberger, added: Japan is a market where conviction and patience tend to be rewarded, and we've seen growing client demand for a strategy that goes beyond the index and engages directly with companies. This fund gives them access to a team that has been doing exactly that for years, through a structure built around their needs.
Key risks
As with any equity strategy, investors should weigh several risk factors before allocating, including:
- Market risk — value fluctuations driven by underlying market factors, including corporate results and perceptions of the global economy.
- Liquidity risk — the fund may be unable to sell an investment easily at fair market value, particularly in stressed conditions, which can affect its ability to meet redemption requests.
- Concentration risk — a concentrated portfolio may exhibit greater performance variability than a more diversified fund.
- Counterparty risk — the risk that a counterparty fails to meet a payment obligation on a transaction or contract by its due date.
- Non-complex derivatives risk — the fund may use certain derivative instruments to hedge specific risks, generating leverage capped at 100% of fund assets; the investment manager ensures derivatives use does not materially alter the fund's overall risk profile.
- Operational risk — potential losses from inadequate or failed processes, people and systems — including asset safekeeping — or from external events.
- Currency risk — investors subscribing in a currency other than the fund's base currency are exposed to exchange rate fluctuations, which can increase or decrease returns when converted back to an investor's local currency.
