Trustnet Magazine Issue 13 December 2015 | Page 17

JAPAN

INVESTORS GET
HUNG UP ON WHAT IS
TAKING PLACE IN THE
ECONOMY AND MISS
OPPORTUNITIES THAT
MAY BE PRESENTING
THEMSELVES AT THE
STOCK MARKET LEVEL

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City Asset Management’s head
of research James Calder says the
firm has spent 2015 building its
weighting to Japan. Having
adopted a zero weighting for a
number of years, it increased this

PERFORMANCE OF INDICES YEAR TO DATE
25%
20%

Nikkei 225 (14.51%)

MSCI Europe (3.17%)

S&P 500 (6.56%)

FTSE 100 (0.40%)

15%
10%
5%
0%
-5%

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

-10%
Jan 15

“In the summer of 2014, we met
Legg Mason’s Japan manager Hideo
Shiozumi, who has seen all of these
false dawns before, and he told us
that he was as bullish as he has
ever been, which was an important
signal for us,” he added.
The Apollo Balanced fund
had almost 16 per cent in Japan
following that meeting, close
to an all-time high. However,
that weighting was reduced
to 12 per cent earlier this year,
compared with 4 per cent from its
benchmark, when it sold out of
the Lyxor Nikkei 400 ETF.
Hughes says that although being
overweight in 2014 proved to
be painful, it paid off in 2015. In
addition to holding Shiozumi’s
Legg Mason IF Japan Equity fund –
which tops the IA Japan sector over
one and five years and is second
over three – Hughes also holds
Coupland Cardiff Japan Alpha,
managed by Jonathan Dobson.

to 3 per cent in in the balanced
mandate it runs in the fourth
quarter of 2014 and has increased
this to 7 per cent since then.
“The reason for this positivity
is nothing that hasn’t been said
before,” Calder said. “There is a lot
of stimulus taking place from the
Bank of Japan and you are seeing
corporate change take place, with
returns on equity becoming a
much more important part of the
overall return profile.”
“While of course the road along
the way will be bumpy, we are
also hopefully moving into an

Source: FE Analytics

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