Noritsu Koki Co., Ltd.
Noritsu Koki Co., Ltd. engages in the manufacture and sale of environment solution, kitchen, and photo processing equipment. It operates through the following segments: Monodzukuri, Health Care, Drug Discovery, Senior Life, Agricultural Food, and Others. The Monodzukuri segment handles research, development, production, and sale of pens and cosmetic parts. The Health Care segment provides radiology services, survey data, and genetic testing. The Drug Discovery segment provides research, development and sale of biopharmaceuticals. The Senior Life segment handles publication and mail order services for seniors. The Agricultural Food segment produces and sells fresh vegetables. The Others segment handles investigation and investment of new growth areas. It also offers mail order for dental materials and development and sale of drug treatment database for insurance companies. The company was founded by Kanichi Nishimoto in June 1951 and is headquartered in Tokyo, Japan.
COMMENTARY
Market review
Global equity markets began 2026 on a firmer footing in US dollar terms, with leadership broadening beyond the narrow mega-cap technology cohort that dominated much of last year. However, a stronger Australian dollar reduced returns in local currency terms, resulting in modestly negative outcomes for Australian investors despite generally positive underlying market performance.
Performance dispersion remained elevated across regions and sectors. International equities outperformed US large caps in US dollar terms, supported by strength in parts of Europe and emerging markets. Korea and Taiwan were particularly strong, while several Latin American markets also advanced. In contrast, US mega-cap technology delivered more muted returns amid mixed earnings reactions.
Sector leadership reflected a rotation toward more cyclical exposures. Energy and materials were among the strongest-performing areas, supported by higher commodity prices and renewed geopolitical tensions in the Middle East. Consumer staples also delivered solid gains, while technology, healthcare and financials lagged.
Central bank policy divergence continued to influence capital flows and currency movements. The Federal Reserve held rates steady during the month, signalling a cautious pause as inflation remained above target. The European Central Bank and Bank of Japan also maintained policy settings, while Australia’s comparatively hawkish stance contributed to currency strength. Overall, January reflected a further broadening of market leadership and continued style rotations beneath the surface.
Portfolio Commentary
The Fund modestly outperformed its benchmark in January, with stock selection the primary contributor to relative returns. While currency movements influenced headline outcomes, company-specific developments were the more important determinant within the portfolio.
A new position was initiated in Clarkson PLC, the world’s largest shipbroker, with a market share well ahead of its nearest competitor. Clarkson operates a scaled global brokerage network and benefits from deeply embedded client relationships across the shipping industry. Its Research division provides proprietary data and analytics to thousands of organisations, generating high levels of recurring revenue at attractive margins. The investment case rests on Clarkson’s dominant competitive position, structural scale advantages and differentiated data assets, which create meaningful barriers to entry in a fragmented market. These advantages support resilient profitability across cycles.
The Fund exited Allfunds Group, crystallising gains following the binding acquisition agreement by Deutsche Börse Group and realising value after a period of strong share price performance.
Among the strongest contributors was NextPower, a provider of solar power solutions, which advanced after delivering results ahead of expectations and raising full-year guidance. A record order backlog reinforced confidence in the durability of demand and the company’s operational execution, supporting improved sentiment toward renewable energy exposures.
Noritsu Koki, a global leader in professional DJ equipment, also contributed positively. The company benefits from its dominant global market share, recurring revenues generated through its rekordbox software ecosystem and a strong net cash balance sheet. Strength in Japanese equities during the month provided a supportive backdrop.
International Seaways, an owner and operator of crude oil tankers, performed strongly as energy markets rallied amid higher oil prices and rising geopolitical tensions. The company’s move to take full ownership of Tankers International further enhanced its fleet optimisation strategy and competitive positioning within the tanker market.
Offsetting these gains were weaker performances from ChemoMetec, a supplier of automated cell-counting instruments to life sciences customers, and Cavco Industries, a US manufacturer of factory-built homes. ChemoMetec declined following revenue disruption linked to the US government shutdown, increasing the implied second-half growth requirement. Cavco experienced margin pressure and acquisition integration costs. Despite near-term volatility, we retain conviction in both holdings’ long-term structural growth drivers and competitive advantages.
Overall, portfolio positioning remains centred on high-quality small-cap businesses with durable competitive advantages and resilient balance sheets. We believe this discipline remains well suited to an environment characterised by rotation, dispersion and shifting macro expectations.