Fund picks: Analysts name their favourites

This article is part of
The investment case for Japan - August 2013

Investment Adviser asks three analysts to nominate their top Japan funds.

Ben Gutteridge, fund analyst, Brewin Dolphin

Schroder Tokyo fund

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Japan continues to enjoy much of the investment spoils, particularly hedged share classes. This strategy supports the theme that a weakening yen can drive corporate earnings higher through improving global competitiveness. Our preferred pick in the region is Schroder Tokyo managed by Andrew Rose.

Mr Rose is an experienced manager with a good team around him. This is a core fund but it has a value, meaning there is a moderate overweight to the more economically sensitive areas of the market, such as technology and industrials. The fund could benefit, therefore, from any data confirming Japan is getting closer to achieving its economic objectives, such as inflation. The fund also offers hedged share classes to add even more conviction to the trade.

Andy Parsons, head of investment research at The Share Centre

Neptune Japan Opportunities fund

This fund is an ideal way of investing within the region, while placing the decision-making firmly at the hands of a manager with a proven track record. Managed by Chris Taylor, the fund aims to achieve consistent capital growth by investing in a concentrated portfolio of approximately 40–60 Japanese stocks. The Neptune investment approach is led by cohesive and team-driven active management, wherein fund managers combine their roles with global sector analysis. There is no fixed style in so much as it is neither top down or bottom up, nor growth or value driven selection. The portfolio is constructed on a stock-by-stock selection basis, formulated from the proprietary global sector research and valuation models with the emphasis being placed on trends and dominant leading companies.

Mark Lane, senior research analyst, Bestinvest

GLG Japan Core Alpha fund

For investors that are very bullish on the recovery in Japan we would suggest GLG Japan Core Alpha. Stephen Harker does have a strong track record of outperforming in strongly rising markets due to his contrarian style. However this style does lead to periods of underperformance.

JOHCM Japan fund

For investors that are not prepared to accept the periods of underperformance from the GLG fund, we would recommend JOHCM Japan, managed by Scott McGlashan and Ruth Nash. These managers have an ‘all cap’ approach and have navigated the recent market impressively.