Horizon Kinetics Japan Owner Operator ETF (JAPN)

Overview

The Horizon Kinetics Japan Owner Operator ETF (ticker: OJAP) seeks to invest in Japanese companies with significant owner-operator involvement, believing that such alignment leads to superior long-term performance. It focuses on firms where founders, families, or key executives have a substantial ownership stake, influencing management and strategic direction.

Reputation and Reliability

Horizon Kinetics is a smaller, research-driven investment firm known for its concentrated portfolios and value-oriented approach. They have a solid track record, particularly in niche areas, although their overall AUM is smaller compared to industry giants.

Management Expertise

The management team has considerable experience in identifying and analyzing companies with owner-operator characteristics, focusing on long-term value creation rather than short-term market trends.

Goal

To achieve long-term capital appreciation by investing in a portfolio of Japanese companies with significant owner-operator involvement.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index. It employs active management, selecting companies based on fundamental analysis and the presence of owner-operator characteristics.

Composition The ETF primarily holds stocks of publicly traded Japanese companies. The portfolio is relatively concentrated, with a smaller number of holdings compared to broad market ETFs.

Market Share: OJAP holds a small market share within the Japan equity ETF category.

Total Net Assets (AUM): 45780000

Key Competitors

• iShares MSCI Japan ETF (EWJ)
• WisdomTree Japan Hedged Equity Fund (DXJ)
• JPMorgan BetaBuilders Japan ETF (BBJP)

Competitive Landscape

The Japan equity ETF market is dominated by larger, passively managed ETFs that track broad market indices. OJAP differentiates itself through its active management and focus on owner-operator companies, offering a potentially higher return profile at the cost of higher risk and potentially higher fees. Its advantage lies in its differentiated strategy, while its disadvantage stems from higher concentration and potentially lower liquidity compared to broader ETFs.

Historical Performance: Historical performance data is available for OJAP, but its relatively short trading history should be considered when evaluating long-term performance. Investors should analyze past performance in various market conditions.

Benchmark Comparison: A relevant benchmark for comparison would be the MSCI Japan Index, allowing investors to assess OJAP's performance relative to the broad Japanese equity market.

Expense Ratio: 0.78

Average Trading Volume

OJAP's average trading volume is moderate, which could affect execution costs for larger trades.

Bid-Ask Spread

The bid-ask spread can vary but should be monitored to understand the cost of entering and exiting positions.

Market Environment Factors

Economic indicators in Japan, global market sentiment, and sector-specific trends affecting Japanese companies influence OJAP's performance. Owner-operator businesses are often more resilient.

Growth Trajectory

OJAP's growth trajectory depends on the success of its investment strategy in identifying and capitalizing on the performance of owner-operator companies in Japan. Changes in holdings are disclosed periodically.

Competitive Edge

OJAP's competitive advantage lies in its unique investment strategy focused on owner-operator companies, offering a differentiated approach compared to traditional Japan equity ETFs. This approach could lead to superior long-term returns if the selected companies outperform their peers due to better management and alignment of interests. Its active management approach provides flexibility to adapt to changing market conditions and identify undervalued opportunities. The ETF's concentrated portfolio may also contribute to higher alpha generation.

Volatility

OJAP's volatility may be higher than broad market Japan ETFs due to its concentrated portfolio and active management style.

Market Risk

OJAP is subject to market risk associated with investments in Japanese equities, including economic downturns, currency fluctuations, and geopolitical events.

Ideal Investor Profile

OJAP is suitable for investors seeking long-term capital appreciation and exposure to Japanese equities with a focus on owner-operator companies. Investors should have a higher risk tolerance due to the ETF's concentrated portfolio and active management.

Market Risk

OJAP is best suited for long-term investors who understand and accept the risks associated with a concentrated, actively managed ETF.

Horizon Kinetics Japan Owner Operator ETF (OJAP) offers a unique approach to investing in Japanese equities by focusing on companies with significant owner-operator involvement. Its active management strategy and concentrated portfolio differentiate it from broader, passively managed Japan ETFs. While the ETF's unique strategy could lead to higher returns, investors should be aware of its higher risk profile and potentially lower liquidity. It may be suitable for long-term investors seeking differentiated exposure to the Japanese market willing to accept a concentrated portfolio and active management, but the expense ratio is high.

Data Sources:

• Horizon Kinetics ETF Website
• ETF Database
• Morningstar
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions.