Mirabaud’s global equities manager Anu Narula has moved his fund to an overweight position in Japan for the first time in its history.
Mr Narula took on the Luxembourg-based Mirabaud Equities Global fund in June after joining from Axa Framlington as head of global equities and has set about putting his stamp on the product, which the Swiss asset manager is looking to roll out further in the UK this year.
The manager said: “Historically, I have been very pessimistic on Japan. It has been a value trap, as it looks very cheap but the return on equity keeps coming down.
“With Abenomics, there has clearly been a change of mindset. There is some sense of inflation and corporations are putting through wage increases.”
Mr Narula said he had been increasing exposure to Japan on his previous product, the Axa Framlington Global Opportunities fund, at the beginning of the year prior to his departure but had held off buying into the Japanese market when he moved to Mirabaud due to the market’s strong rally.
But following “consolidation” in October and November and a visit to the country in December, Mr Narula added four new holdings to the $44.6m (£27.2m) portfolio. Among the stocks added to the fund are Seven & I, which owns the 7-Eleven general store chain in the US, and domestic telecoms firm KDDI, which Mr Narula said was benefiting from the increased use of smartphones.
He has also added positions in Ryohin Keikaku, which owns the international chain of Muji stores, and Keyence, a specialist provider of factory sensors and equipment.
In contrast, Mr Narula said “old Japan” areas such as car manufacturers and technology companies have been overtaken by competition from Korea and become “less competitive”.
Elsewhere in the portfolio, the manager said he had been increasing exposure to Europe at the expense of the US, taking profits from some holdings following the US’s strong performance in 2013.
However, he added that equity markets needed to see capital expenditure from companies improving this year to extend the performance seen in 2013.
Mr Narula said: “Capital spend is the missing piece. Companies have repaired their balance sheets but are hoarding cash.
“We’ve not seen a big pickup in capital expenditure and that needs to happen this year.
“The replacement cycle [for equipment] has been elongated more than ever, as it was pushed back by the eurozone crisis.
“Chief investment officers’ intentions are now that capital expenditure is much higher on the priority list.”
The Mirabaud Equities Global fund has underperformed its MSCI World benchmark since its launch in January 2011, but has performed broadly in line with the index since Mr Narula took over, gaining 14.2 per cent.
Mirabaud plans greater penetration of UK market in 2014
Anu Narula’s appointment in June 2013 as head of global equities was part of a wider recruitment drive last year to beef up Mirabaud’s presence in the UK.