Japan’s growth sparks specialist fund launch

The current turnaround in Japan’s economy heralds the beginning of further improvements, according to Japanese investment experts who are predicting the trends of increased investment and consumption and strong company balance sheets will continue.

Invesco Asset Management Japan chief investment officer Atsushi Kawakami echoed other analysts’ opinions that increasing demand for Japanese produced goods, along with structural changes in the Japanese economy, would bring stable growth for the medium to long-term.

The company’s head of Japan large cap equity team Kiyohide Nagata said the changes had also driven improved company profitability, but despite this the equities market in Japan remained undervalued.

Japan’s strong economic climate has prompted several fund managers to establish Japan funds, with Invesco the latest to launch a specialist Japan fund for retail investors.

Invesco director of retail sales and marketing Mick O’Brien said the Wholesale Japanese Equity Trust had been opened to retail investors in Australia after operating for 13 years as the basis of the company’s Asian share fund, which currently has 70 per cent exposure to the Japan fund.

O’Brien said the fund invests in between 50 and 100 large cap Japanese stocks, and currently has 70 stocks in its portfolio.

The portfolio uses a benchmark relative model coupled with an aggressively managed model that targets companies that are responding to a growth catalyst but which are still reasonably priced.

It has exposure across all industrial sectors in Japan, and is currently overweight in industrials and materials to capitalise on growth in those sectors.