The prime ministerial reign of Shinzo Abe has led to renewed confidence in the Japanese market but some doubts raised over his ability to instigate the much-discussed ‘third arrow’ of his Abenomics programme.
Fears of his ability to execute policy were seemingly dispelled with his landslide victory in December’s snap election.
While the market waits to see whether this gives Abe enough of a platform to further revive Japan’s economic outlook, Citywire Global has dug into fund manager performance to see who has flourished under his tenure.
Rewinding to the end of November 2013, there were 181 fund managers active in the Equity Japan sector, which has grown to 188 one year later.
Over the two years to the end of November 2014, the Topix rose 87.57% in yen terms, while the average manager in the sector went slightly above, with a return of 87.6%.
While Abenomics appears to have given the Topix a shot in the arm, which fund managers have risen the to the fore against an increasingly accommodative backdrop?
Ken Maeda, Schroders
- Ranking period one (November 2012-November 2013): 86/181
- Ranking period two (November 2013-November 2014): 10/188
Citywire + rated Ken Maeda is among the most improved in the Japanese equity sector over the past month, rising 76 places over the two rankings period. This is thanks, in large-part, to his performance over the past 12 months.
Over this timeframe, Maeda, who has run the Schroder ISF Japanese Opportunities fund since December 2006, has returned 18.9% in yen terms, while the average manager in the sector returned 12.6%. However his two-year numbers are better than many of his peers, having returned 97.3%.
In the €444 million fund, Maeda operates a diverse approach, with his largest sector exposures being to transportation equipment (15.2%) and wholesale trade (13.8%). His largest single positions are in banking group Sumitomo Mitsui Financial Group (4.2%) and wholesale trader Itochu (3.9%).
Robert White, Oldfield Partners
Fund: Overstone Japan Equity A
- Ranking period one (November 2012-November 2013): 137/181
- Ranking period two (November 2013-November 2014): 20/188
Posting a more impressive improvement over the same timeframe is Robert White of London-based boutique Oldfield Partners. The 30-year market veteran has run the firm’s Japan equity fund since it was launched as a Dublin-domiciled fund in 2007.
Over the two-year timeframe, White was largely in-line with the average manager, returning 88.2% compared to the average manager return of 87.6%. On a 12-month basis, however, White returned 17.8%, which is over five percentage points above the average peer.
In total, White, who operates on a concentrated basis, investing in 15-25 stocks with a market capitalisation above $1 billion, has improved on his ranking by 117 places compared to where he sat at the end of November 2013.
Chern-Yeh Kwok, Aberdeen AM
- Ranking period one (November 2012-November 2013): 176/181
- Ranking period two (November 2013-November 2014): 6/188
Blowing both managers out of the water is Aberdeen’s head of Japanese equity, Chern-Yeh Kwok. The Citywire A-rated manager rose 170 places up the rankings over the two year period, with this outperformance having been achieved in the past 12 months.
On a two-year basis, Kwok trails the average manager, having returned 77.7% - 9.9 percentage points below the average peer. However, when reduced to the 12-month timeframe, Kwok returned 19.3%, which is 6.7 percentage points above the average manager return.
Kwok mainly invests in consumer goods and services, which make up over 40% of the fund’s sector exposure when combined. He has an underweight to the country’s financial sector, which accounts for 8% of overall exposure. The largest single position is chemicals giant Shin-Etsu Chemical, which is a 5.9% position.