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Japanese and US companies are top performers, says Fidelity research

Japanese and US companies are consistently among the world’s top performing companies, according to analysis conducted by Fidelity International.

But their markets in aggregate are among the worst performing, says Fidelity International.
Using the MSCI World index to study the twenty best performing companies each year since the turn of the century, the analysis reveals that Japanese and US companies dominate the top of the table.

At the end of 1999, Japan claimed 12 of the top 20 slots – half of which were in the top ten. The UK had the second best showing with four companies with the US, Hong Kong and Singapore picking up the remaining places. Japanese companies also featured heavily in the tables in 2000, 2002, 2003, and in 2005.

US companies starting gaining places in 2001 with 10 companies in the top twenty performers. They again pipped Japanese companies to the top spot in 2004.

But the aggregate performance of the Japanese and US markets over the same period has been among the worst in the world. Cumulative performance puts both markets in the bottom five with Japan returning -14.9 per cent and the US returning -15.6 per cent. Finland was the worst performing market falling 46.6 per cent followed by the Philippines (-33.7 per cent) and Taiwan (-27.5 per cent).

The best performing markets over the whole period were; Colombia (746.5 per cent), Czech Republic (513 per cent), Pakistan (349.6 per cent), Russia (282.8 per cent) and Egypt (257.8 per cent). None of these countries had companies featuring in the top 20 tables.

Fidelity Global Special Situations manager designate Jorma Korhonen says: “For stock pickers, market returns have little to do with the increase in value of a particular company – the fundamentals of that stock are the drivers rather than the market. This analysis underlines the importance of stock selection for good, risk-adjusted returns. While the more volatile markets had the best performance over the period, the best stocks where found in very different places. For example, while Japanese and US markets have generally performed badly compared with other markets over the last 7 years, individual stocks from these markets featured heavily in the best performers.

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