The Japanese equity market can exhibit significant dispersion in performance across investment styles. More importantly, investor style preferences in Japan can diverge markedly from those in global equity markets, as demonstrated in 2023 and 2024, when value stocks outperformed growth stocks.
As in many global markets, performance dispersion between value and growth investment styles can be significant within the Japanese equity market. This divergence was evident in 2020, when the Morningstar Japan Growth TME Index outperformed the Morningstar Japan Value TME Index by more than 23 percentage points. In contrast, two years later, value stocks outperformed growth stocks by approximately 24 percentage points.
Including 2025, value stocks have outperformed growth stocks in Japan consistently in each calendar year since 2021.
More notably, the Japanese equity market has been led by value stocks in recent years. While growth stocks dominated in 2023 and 2024, driven by the ‘Magnificent Seven’ and AI-related companies, value stocks were the standout performers, delivering annual returns of around 20 percent compared with approximately 11 percent for growth stocks. Including 2025, value stocks have outperformed growth stocks in Japan consistently in each calendar year since 2021.
Given the significant impact that investment style can have on investor outcomes, Morningstar made the important decision to enhance the categorization of Japanese equity funds. Previously, all Japanese largecap equity funds were grouped into a single category but as of November 2025, three style-conscious categories were introduced: Japan Large-Cap Value Equity, Japan Large-Cap Blend Equity, and Japan Large-Cap Growth Equity. This enhanced framework should make it easier for investors to make informed decisions and select funds that align with their preferred investment style.
We discuss two funds within the Morningstar Category Japan largecap growth equity for investors who believe in a revival of the growth style in the Japanese equity market: Comgest Growth Japan versus JPM Japan Equity.
People
Comgest Growth Japan and JPM Japan Equity both benefit from experienced portfolio managers, but they differ meaningfully in team structure, decision-making and resourcing.
Comgest Growth Japan has recently experienced a portfolio manager departure but there is continuity through two long-tenured managers, Chantana Ward and Richard Kaye, who make decisions collaboratively and have worked together for more than a decade. The strategy is supported by a small but adequate analyst bench. Portfolio managers also undertake stock coverage, reinforcing a focused, high-conviction culture. The strategy earns a People Pillar rating of Above Average.
By contrast, JPM Japan Equity is anchored by a single, highly influential lead manager, Nicholas Weindling. While supported by comanagers, decision-making is clearly centralized. The strategy benefits from one of the largest and most experienced Japanese equity teams in the market, with extensive sector analyst coverage across large- and smallcap stocks and deep integration within JPMorgan’s broader Asia-Pacific platform. This warrants a People Pillar rating of High.
Process
Comgest Growth Japan and JPM Japan Equity both employ well-established quality-growth investment philosophies grounded in bottom-up fundamental analysis, but they differ in portfolio construction, research breadth, and expression of conviction. Comgest is rated Above Average on the Process Pillar, while JPMorgan has a High rating.
Comgest’s approach is narrower and more disciplined, starting from a tightly defined investable universe of 80–100 high-quality companies that meet stringent criteria around business transparency, balance-sheet strength, competitive advantages, and earnings visibility. Conviction is expressed through a concentrated portfolio of roughly 40 holdings, high active share, and a long-term holding period, with turnover typically below 20 percent. The process has been executed consistently across market cycles, preserving a quality-growth bias even during periods of pronounced style headwinds.
JPM Japan Equity also follows a quality-growth framework but applies it across a much broader research universe of approximately 400 stocks, systematically classified by economic quality and governance. Portfolio construction blends premium and quality stocks with selectively valued standard names, while avoiding structurally weaker companies. Lead manager Weindling emphasizes high-conviction ideas and is willing to pay elevated valuations.
Portfolio
Comgest Growth Japan and JPM Japan Equity both have portfolios constructed through bottom-up stock selection and express conviction through concentrated holdings and high active share, while allowing sector exposures to emerge from individual investment decisions rather than top-down views. Both strategies also share a pronounced growth bias, meaningful exposure to technology, and a structural underweight to energy and utilities.
Key differences lie in how sector positioning evolves and how conviction is expressed. Comgest’s sector weights have shifted materially in recent years, most notably through a sharp increase in technology exposure since 2023. At the same time, the strategy has reduced consumer discretionary exposure following stock-specific concerns.
JPM Japan Equity, by contrast, owns much fewer technology stocks. The strategy is more flexible in venturing into traditionally non-growth sectors when compelling opportunities arise. For example, it has a significant overweight in the industrials sector and has also more capital allocated to the financial services sector than Comgest.
Performance
Comgest Growth Japan and JPM Japan Equity have both delivered strong long-term outcomes through high-conviction, bottom-up stock selection, but their performance profiles differ in consistency and volatility. Comgest has outperformed its growth benchmark and peers over the past 15 years with superior downside resilience, although returns were uneven and lagged during the 2021–2025 growth drawdown. JPM Japan Equity has also generated attractive long-term returns, but has held up much better in recent years when growth was out of favor.
Ronald van Genderen is a senior manager research analyst at Morningstar. Morningstar analyzes and rates investment funds based on quantitative and qualitative research. The firm is a member of Investment Officer’s expert panel.