Growth opportunities
In order to achieve its objective, the fund invests in an all-cap portfolio of Japanese companies, which the managers believe are posed to benefit from increasing growth opportunities in Asia and the improvement in the corporate governance environment, as well as a promising domestic Japanese growth outlook.
The Luxembourg-domiciled fund has a management fee of 0.75 per cent and currently has $778.1m (£492.5m) worth of assets under management.
Asset allocation is 25 per cent in industrials, 16.1 per cent in information technology, 14.5 per cent in consumer staples, 13.9 per cent in consumer discretionary, with the remainder split between healthcare, financials, telecom services, materials, energy, utilities, cash, and other.
While Japan is often viewed by investors as a large-cap value market, the managers of the fund assert that Japan is a long-term, core investment with opportunities across the market-cap spectrum.
The Japanese economy has benefited from rising incomes and improving productivity across Asia as a whole, which will further improve the prospects for investment in the Japanese equity market.
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Comment
Despite the recent 20-year slump, the managers of this fund have good reason to be optimistic about the Japanese economy. The government’s finances are improving as the fiscal deficit is decreasing. Corporate savings are also declining, meaning that companies are spending more money, which is likely to foster economic growth. The motive of self-preservation is fading away and evolving into mindset of corporate growth.
The Japanese workforce is currently very labour-intensive, but that is beginning to shift to a greater focus on automation, and therefore improving productivity. Japan is home to four of the biggest robotics companies, so the transformation to greater reliance on technology in production will likely be swift.
