Asia‑Pacific Japan
Portfolio
Q1 2026 · January – March 2026
Macro & Market Context
For the full macro and market environment commentary, please refer to the Emit Capital Global Opportunities Portfolio Q1 2026 Quarterly Report.
That report covers the Q1 Iran conflict, global oil shock, sovereign bond market analysis, the Emit Nexus investment thesis, and the full cross-asset review.
The key macro developments that shaped portfolio outcomes in Q1 2026 — the Iran conflict and Strait of Hormuz closure, the global oil price shock, the synchronised repricing of sovereign yield curves across the US, Germany and Japan, and the central bank pivot from accommodation to hawkish restraint — are covered in full in the Global Opportunities Q1 2026 Quarterly Report. This supplement focuses on the portfolio-specific performance, positioning, and outlook for the Asia-Pacific Japan Portfolio.
Portfolio Performance
Performance Summary — AUD Returns to 31 March 2026
| 1 Mth | 3 Mth | 6 Mth | 1 Yr | SI (Total) | |
|---|---|---|---|---|---|
| Asia-Pac Japan Portfolio | −6.6% | +6.7% | +4.4% | +14.9% | +14.4% |
| MSCI Asia-Pac Index | −10.3% | −3.3% | −0.9% | +15.5% | +14.3% |
| Active Return | +3.7% | +10.0% | +5.2% | −0.6% | +0.1% |
Performance is net of fees. Based on the aggregation of all managed accounts. Individual account performance may vary.
The Asia-Pacific Japan Portfolio delivered +6.7% (AUD) for Q1 2026, outperforming the MSCI Asia-Pacific Index by +10.0 percentage points. Fujikura (5803.T) was the standout contributor at +286 bps — the Japanese cable manufacturer is a direct picks-and-shovels beneficiary of both the AI data centre buildout and Japan's accelerated grid investment programme. Sumitomo Electrical (5802.T) contributed +222 bps for similar reasons, confirming that Japanese cable and electrical infrastructure names were the primary driver of portfolio alpha in the quarter. Advantest (+64 bps), Kansai Electric (+35 bps), and Sumitomo Mitsui (+13 bps) completed a positive top five.
The primary detractors were DeepYellow (−226 bps), Alibaba (−194 bps), and Tokyo Electron (−109 bps). March was particularly severe — the portfolio fell −6.6% against the benchmark's −10.3% as the Iran conflict and rising JGB yields triggered broad regional risk-off, but the derivatives overlay materially contained the drawdown relative to the index.
Growth of $100,000. Approximate inception NAV series used for illustrative purposes.
Portfolio Analytics
Top 5 Contributors — Q1 2026
| # | Holding | Sector | BPS Contrib. |
|---|---|---|---|
| 1 | Fujikura 5803.T | Industrials | +286 bps |
| 2 | Sumitomo Electric 5802.T | Cons. Cyclical | +222 bps |
| 3 | Advantest 6857.T | Technology | +64 bps |
| 4 | Kansai Electric 9503.T | Utilities | +35 bps |
| 5 | Sumitomo Mitsui 8316.T | Financials | +13 bps |
Top 5 Holdings — Portfolio Weight
| # | Holding | Sector | Port Wt % |
|---|---|---|---|
| 1 | Omron 6645.T | Industrials | 5.8% |
| 2 | Fuji Electric 6504.T | Industrials | 5.7% |
| 3 | Kansai Electric 9503.T | Utilities | 5.6% |
| 4 | Sumitomo Electric 5802.T | Cons. Cyclical | 5.5% |
| 5 | Sumitomo Mitsui 8316.T | Financials | 5.4% |
Regional Outlook & Positioning
The Asia-Pacific Japan Portfolio targets high-conviction exposure to Asia-Pacific and Japanese equities capturing structural growth in technology, electrification, and infrastructure, while actively managing currency, volatility, and drawdown risk. Q1 2026 was a challenging quarter for the region, with the Iran oil shock and rising JGB yields creating a headwind for Japanese industrials, while the options overlay limited the March drawdown materially relative to the benchmark.
The Asia-Pacific Japan Portfolio is positioned to capitalise on structural investment themes within its regional universe, supported by the Emit Nexus derivatives overlay which provides active downside risk management and tactical flexibility across market regimes.
Key Positioning Themes — Q2 2026
- Build further conviction in Fujikura and Sumitomo Electrical. Their +286 bps and +222 bps Q1 contributions validate the thesis that Japanese cable infrastructure is a direct AI and grid electrification beneficiary with multi-year order visibility.
- Reassess DeepYellow (−226 bps) and review uranium exploration exposure. The structural uranium bull thesis remains intact but the speculative end of the market attracted heavy selling in Q1's risk-off environment.
- Monitor Alibaba (−194 bps) closely. The combination of China macro headwinds and geopolitical risk drove significant underperformance; any policy stimulus or US-China trade clarity would be a catalyst, but position sizing should remain disciplined.
- Tokyo Electron (−109 bps) warrants reassessment. Semiconductor equipment demand remains structurally strong, but near-term valuation compression from rising JGB yields and yen dynamics weighed heavily in Q1.
- Use the BoJ rate hike trajectory as a portfolio construction overlay. Kansai Electric and Sumitomo Mitsui (both positive contributors) benefit from domestic Japanese reflation, while export-oriented tech names face headwinds from yen strength.
Portfolio Facts & Structure
| Name | Emit Capital Asia-Pac / Japan Portfolio |
| Structure | Separately Managed Account (SMA) |
| Investor Type | Wholesale |
| Asset Class | Asia-Pacific & Japanese Listed Equities |
| Regions | Asia-Pacific, Japan |
| Benchmark | MSCI Asia-Pac Index |
| Strategy Inception | 1 February 2025 |
| Holdings | 15–25 positions |
| Cash Range | 5–15% |
| Minimum Investment | A$250,000 or equivalent |
| Pricing | Daily |
| Prime Broker | Interactive Brokers (IBKR) |
| Currency | AUD / USD |
| Allocation in Global Opps | 25% of Global Opportunities Portfolio |
| Manager | Emit Capital Asset Management Pty Ltd |
| AFSL / ABN | 551084 | ABN 57 652 326 237 |
This portfolio is one of five strategies managed by Emit Capital Asset Management. For the full firm overview and Global Opportunities Quarterly Report, visit emitcapitalam.com.