I believe Scott McGlashan is the best Japanese fund manager of all. JO Hambro has hired him to run its new Japan Oeic and, like the other JO Hambro fund managers, he has a share in the equity and the performance fee as well as investing his own money in the fund.
He has over 23 years experience of managing Japanese equities and, while at Invesco Perpetual from 1988/99, his fund was up by 105 per cent at a time when the Japan Topix index was down by 22 per cent.
McGlashan also outperformed the index by 44 per cent while managing the Close Finsbury Japan fund from 2000/02.
While there have been many false dawns in the Japanese market, Japanese equities are now realistically valued.
The Japanese economy is recovering, companies are enjoying the benefits of restructuring and profits are surging. McGlashan believes that this improvement in profitability should be sustained.
Japan's pension and insurance funds are very underweight in equities compared with other countries and, with rising interest from international buyers too, the stockmarket should rise considerably.
The main reason why McGlashan has consistently outperformed is that he avoids most of the top 100 stocks by market capitalisation and finds attractive growth stocks which are inefficiently priced. This undervaluation generally occurs because they are underresearched.
Unlike many other fund managers, if McGlashan makes a mistake, he cuts his losses immediately rather than waiting for stocks to recover, which they often never do.
It would be sensible to invest in this fund now as it is likely to be capped at around £200m – a level at which McGlashan thinks it would be difficult to continue to outperform. This fund should be another JO Hambro winner.