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One Japanese stock index bucks poor returns with 30% gain this year


JAPANESE equities may be the worst performers in the developed world this year, but one corner of the market is bucking that trend.

A measure of key stocks from the Tokyo Stock Exchange's Mothers Index for startup companies has surged 30 per cent in 2019, far outpacing the 6.4 per cent gain in the benchmark Topix gauge.

The TSE Mothers Core Index picks 15 companies from the broader 283-member Mothers measure. They're selected on criteria such as market capitalisation, trading value, profit and dividends, according to index compiler Japan Exchange Group Inc.

The Simplex TSE Mothers Core ETF, which tracks the index, is one of the best-performing Japan-focused equity funds this year, according to data compiled by Bloomberg.

Performance has been driven by a biotech stock, Sosei Group Corp, whose shares have soared 188 per cent in 2019. Sosei accounted for about 11 per cent of the ETF's assets at the end of January. Other contributors include Rakus Co, a cloud-service provider whose shares have risen almost 60 per cent this year, and Baycurrent Consulting Inc, a business-strategy and information-technology consultant that's up 80 per cent.

But a word of warning: this is a volatile index. It lost almost half its value in 2018. BLOOMBERG