Differentiated Japanese Equity Investing Adding Value

In this webinar, Yutaka Uda and Maiko Uda, the portfolio management team of the Nippon Growth (UCITS) Fund provide an in-depth analysis of the Japanese economy and the opportunities that will arise in the next five years. Yutaka comments on the current conditions and notes that the markets are very similar to 1985 and the team are very excited about the years ahead.

Webinar
Fund Commentary
15 Dec 2022

In this webinar, Yutaka Uda and Maiko Uda, the portfolio management team of the Nippon Growth (UCITS) Fund provide an in-depth analysis of the Japanese economy and the opportunities that will arise in the next five years. Yutaka comments on the current conditions and notes that the markets are very similar to 1985 and the team are very excited about the years ahead.

We believe there are few peers that currently offer similar exposure to the Japanese market as we do. Thanks to the active management style adopted, the Fund has delivered returns to investors of circa 10.5% YTD to the end of October, whilst the majority of our peers and the index are in negative territory.

During the webinar the team discuss the following topics:

  • Why the current conditions of the Japanese economy and market are very similar to that of 1985, and the opportunities the team see over the next few years.
  • Why the Japanese economy will grow in 2023 and beyond and why they believe this trend is likely to continue for the next 3 to 4 years.
  • Infrastructure demand in Asia to accelerate substantially.
  • Global growth will shift from IT investment to infrastructure investment in Japan and US markets.
  • The total Japanese economic stimulus is set at 39 trillion which will have a big impact on Japan.
  • COVID update on how the opening of Japan’s borders will increase tourism substantially in the coming years.
  • Japanese individuals have excess savings – approximately 51 trillion, which is roughly 10% of GDP. This has the potential to stimulate consumption.
  • Japanese export will take advantage of the global recovery.
  • Capital spending will increase.
  • Windfall profits will increase for Japanese manufacturers.
  • Border regulations changed in October allowing movement in and out of Japan – Japan reopening to foreign tourists. Foreign tourists visiting Japan will recover with an estimate of 25 million in 2024, and 30 million in 2025 which will have a huge impact on consumption, economic activities and capital expenditure.
  • Japanese Yen stands at an extremely cheap level to provide a fantastic opportunity for investment.
  • Outside to inward investment – foreign investors increasing investment in Japan.
  • They predict that companies will increase their CapEx by 25% each year.
  • Japanese manufacturing will become very competitive.
  • Property market – Real Estate stocks will outperform when the Vacancy rate peaks in summer 2023, providing a compelling opportunity to add real estate stocks.
  • US / Japanese Bonds. Bank shares will outperform the index massively in the coming 2 years.
  • Japan’s market remains very cheap in comparison to the US.
  • Significant investment is expected in terms of the hosting of the World Exposition in Osaka in 2025, with additional commitments in 2028-2029 in order to integrate a resort in Osaka.
  • Bullish regarding the machinery sector. Given the anticipated global infrastructure investments.

In summary, the team expect that over the coming years the Japanese economy will enjoy a considerably higher growth rate compared with the past 30 years.

Click Nippon Growth (UCITS) Fund to view further information and the past performance of the Fund.

We invite investors and prospects to contact us should they wish to receive any additional information.

Adam TurbervilleAdam Turberville
Director
+44 1481 742380
a.turberville@ericsturdza.com

Alisdair BellAlisdair Bell
Sales Director
+44 20 7952 0512
a.bell@ericsturdza.com

 

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The views and statements contained herein are those of Evarich Asset Management in their capacity as Investment Advisers to the Funds as of 29/11/2022 and are based on internal research and modelling. Please click on Disclaimer Page to view full disclaimers.