Shin-Etsu Chemical Co Ltd: A Significant Move by Hennessy Japan Fund

This article first appeared on GuruFocus .

Exploring the Strategic Portfolio Adjustments in Q2 2026

Hennessy Japan Fund ( Trades , Portfolio ) recently submitted its N-PORT filing for the second quarter of 2026, shedding light on its strategic investment decisions during this period. Established on October 31, 2003, the Hennessy Japan Fund ( Trades , Portfolio ) aims for long-term capital appreciation by investing at least 80% of its net assets in equity securities of Japanese companies. The fund employs a consistent and repeatable investment process, combining time-tested, purely quantitative stock selection formulas with a highly disciplined, team-managed approach. The fund focuses on stocks of companies with strong management and attractive pricing, based on rigorous research into market growth potential, management quality, earnings quality, and balance sheet strength. The portfolio is concentrated, selecting only the managers' best ideas.

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Summary of New Buy

Hennessy Japan Fund ( Trades , Portfolio ) added a total of one stock during the quarter:

• The most significant addition was SUMCO Corp ( TSE:3436 ), with 253,000 shares, accounting for 0.93% of the portfolio and a total value of 4.04 million.

Key Position Increases

Hennessy Japan Fund ( Trades , Portfolio ) also increased stakes in a total of two stocks:

• The most notable increase was in Shin-Etsu Chemical Co Ltd ( TSE:4063 ), with an additional 144,100 shares, bringing the total to 516,400 shares. This adjustment represents a significant 38.71% increase in share count, a 1.54% impact on the current portfolio, and a total value of 23.78 million.

• The second largest increase was in Recruit Holdings Co Ltd ( TSE:6098 ), with an additional 21,500 shares, bringing the total to 396,900. This adjustment represents a 5.73% increase in share count, with a total value of 18.39 million.

Key Position Reduces

Hennessy Japan Fund ( Trades , Portfolio ) reduced its position in 13 stocks, with the most significant changes including:

• Reduced Daikin Industries Ltd ( TSE:6367 ) by 24,600 shares, resulting in a -24.85% decrease in shares and a -0.72% impact on the portfolio. The stock traded at an average price of 19,899.6 during the quarter and has returned 21.76% over the past 3 months and 19.85% year-to-date.

• Reduced Hitachi Ltd ( TSE:6501 ) by 39,000 shares, resulting in a -3.25% reduction in shares and a -0.33% impact on the portfolio. The stock traded at an average price of 4,994.67 during the quarter and has returned -6.16% over the past 3 months and -6.56% year-to-date.