ABN Amro Asset Management is getting into people's heads with the introduction of the behavioural finance Japan fund.
The fund is a Luxemburg-based Sicav managed from Hong Kong, that is aimed at experienced investors looking to move into Japanese funds.
The behavioural finance Japan fund is denominated in Yen and will track the MSCI Japan index. It will operate by anticipating investors behaviour and attempt to benefit from this.
For example, investors can overreact to a fall in a company's profits by selling shares even though the company is fundamentally strong. On the other side of the coin, sometimes investors are slow to react to a companys improving position in the market. In both cases, the fund managers will attempt to anticipate this behaviour and either buy or sell as the circumstances demand.
This is the third behavioural fund that ABN Amro has introduced. The other two are the European behavioural finance fund and the Netherlands-based ratio invest fund. Its success will depend not just on its ability to out-guess the market but also on its ability to anticipate the behaviour of investors, which will make the fund risky.
According to Standard & Poor's the ABN Amro European behavioural fund is ranked 148 out of 168 funds, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to May 21, 2001.