Life in Tokyo

Fears of Japan becoming embroiled in the global economic crisis so soon after its own financial meltdown seem to have been allayed in recent weeks, making Jupiter Asset Management's new launch an apt entry to this market.

The Japanese Select fund, domiciled in the UK, is aiming for long term capital growth through investing in small and medium sized companies in Japan. The fund has the flexibility of investing up to 20% in other Asian countries and will look to Hong Kong, South Korea, Taiwan, Singapore and Malaysia for alternative stock holdings.

Run by Simon Somerville, the newly launched Sicav is a sub-fund of the Luxembourg-domiciled Jupiter Global Fund, typically holding between 40 and 55 stocks. The manager will look to take advantage of the growth boom that Japan is currently experiencing.

Benchmarked against the Tokyo Price Index (TOPIX), minimum investment in the fund is £1,000; initial fee is 5% and annual management charge is 1.5%. Initial intermediary commission is 5% and a 0.5% annual trail.

www.jupiteronline.co.uk

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It is certainly an interesting time to invest in Japan, and fund manager Somerville, a bottom-up stock picker, will be looking to exploit the 5.2% growth in Japan's industrial production in April 2009. Exports to the West are still suffering but it is expected that intra-regional trade will make up for this - Japanese trade with China is now greater than trade with the US.

However, the sector has been a poor performer for the past few years. The average five year annual growth rate for the sector is -1.3%, well below the performance of the TOPIX, which has returned 2.3%.

Somerville currently runs the Jupiter Japan Income fund, which has produced top quartile performance. However, everything is relative, and in this case top quartile means having lost less than most of the competition. According to Money Management's latest data, the fund is the fifth best performer over the past three year in its sector, which translates into a £1,000 investment now being worth £690. This compares with a sector average of £591 over the same period.

gareth.shaw@ft.com