It's eyes towards the rising sun as fund managers once more make the case for Japan – the most disappointing major stock market in the world over the last two decades, with its main Nikkei index standing at barely a quarter of its 1990 peak.
And over those 20 years, there have been false dawns galore, with increasingly 'stale' bulls pinning their hopes on the old saw of what goes down must eventually go up. There have been short-term blips but, overall, it has been a depressing long-term experience.
So will it be different this year? Is all the bad news already 'in the price'? Or is Japan destined to remain an investment quagmire?
Allenbridge, the Mayfair-based discount broker which specialises in analysing fund manager performance, now believes that Tokyo may finally offer good opportunities – provided investors pick their funds carefully. For, while the index has remained in the doldrums, some active fund managers have provided good value.
Why then, is Allenbridge now ready to take a more positive view on Japan?
Jonathan Wallis, Director of Research at Allenbridge says: "Equity valuations in Japan are historically low and corporate earnings appear set to grow at a faster pace than in many other developed markets. The economy is geared to world trade, and while the recession hit Japan more than most, we think a bounce-back could occur relatively quickly".
Wallis says: "A new party is now in power for the first time, effectively, since 1955 and it has both a strong majority and a clear 'change' agenda. We are encouraged by efforts to tackle some of the economy's deep-rooted problems, such as wasteful public spending. This could be a further plus for the market if it succeeds".
Allenbridge points out that very few UK managers specialising in Japan made money for those investing in their funds over the past one, three and five years.
In the best fund, an investor's money would have doubled in the last five years; however, in the worst performer, half the investor's money would have been wiped out over the same period. Interestingly, only unit trusts, but no investment trusts made it into the shortlist over these periods.
Being in the right fund is crucial to both preserving and making capital. So which managers succeeded, with at least one of their funds?
In alphabetical order: Fidelity, GLG, Invesco Perpetual, Jupiter, Morant Wright, M&G, Neptune, and Royal London.
GLG's Japan Core Alpha fund has been Allenbridge's sole and consistent recommendation in the Japan sector since 2006. It has risen some 72% in the past five years*.
* as at 5 March 2010 (Trustnet). Past performance is not necessarily a reliable guide to future performance.
Contact Details:
Kate Davidson, Public Relations and Media Manager at Allenbridge Group PLC.
Mob: +44 (0)78 1462 4161
Tel: +44 (0)20 7409 1111
Kate.davidson@allenbridge.co.uk
http://www.allenbridge.co.uk/
Anthony Yadgaroff, Managing Director at Allenbridge Group PLC.
Tel: +44 (0)20 7409 1111
Anthony.yadgaroff@allenbridge.co.uk
Notes to Editors:
Allenbridge Group PLC is a rare beast in the investment jungle, a Mayfair-based discount broker that also advises large FTSE corporate pension funds and global banks. Founded in 1985, it carries out specialist research and consultancy, analysing investment manager performance across a wide range of funds: Unit Trusts, Investment Trusts, Venture Capital Trusts, Enterprise Investment Schemes, Charities, Hedge Funds, Funds of Hedge Funds and institutional Pension Funds.
In addition to providing comprehensive advice and strategic investment consultancy to leading institutions, Allenbridge also offers monitoring services, valuations and its specialised AllenbridgeCare service to individual investors on investment products and tax-shelter vehicles.
Allenbridge's private investor division serves over 14,000 clients; retail and institutional funds under advisement exceed £25 billion.