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Multi-managers buy into Japan bounce

Multi-manager firms are raising their Japanese equity exposure, believing the market is due for a bounce back.

The country’s markets have endured a torrid time in the past 12 months with the average fund in Japan losing 7.1 per cent, according to Investment Management Association figures.

At a Money Marketing multi-manager roadshow in Bristol this week, Jupiter independent funds team head John Chatfeild-Roberts said he recently doubled his exposure across the firm’s Merlin range, with a high of 9.7 per cent on the £317m worldwide fund.

He said: “The core inflation rate going positive is ext-remely interesting and the earnings’ season has also gone well and I think it is a good contrarian call as a lot of stale bulls are still looking to get out. The amount that has come out of Japanese investor hedge funds in the past six months is extremely high and domestic Japanese pension funds have had net inflows into Japanese equities which is also a positive sign.”

Cazenove head of multi-manager Marcus Brookes said he is currently neutral on Japan but expects that to move to a positive footing, with a possible addition to two funds the firm already invests in – Morant Wright Japan and SocGen core alpha plus.

He said: “We have seen a reinvigoration of economic activity and inflation which means the banks can lend. There is enough to keep us interested but if it does not take off, we will run for the hills as Japan has the knack of snatching defeat from the jaws of victory, hence it being the most universally hated market.”

Earlier this year, Credit Suisse’s multi-manager team moved to an overweight position on Japan across its constellation and equity managed funds raising exposure by 9.5 to 12 per cent through the introduction of Melchior Japan advantage across both portfolios.

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