Investing in Asia at the moment may seem foolhardy following the market crash. However, Japan’s investment story remains intact, says Kate Beioley in the Investors Chronicle. With share prices lower and a quantitative-easing programme in full swing, the market remains attractive.
One way to exploit it could be through the CF Morant Wright Nippon Yield Fund, which offers a “defensive way to play the Japanese domestic recovery” as well as providing income, says Beioley. The open-ended investment company is one of the few Japanese funds focused on income, and at 2.3% offers the sector’s highest yield, says Money Observer. Its remit is to generate absolute returns by investing in undervalued Japanese stocks.
The six-person management team, headed by Stephen Morant and Ian Wright, looks for solid balance sheets, attractive dividend yields and “sound business franchises”. Recent performance is impressive, beating its benchmark with returns of 7% over one year, 46.4% over three years and 61% over five years, according to Trustnet.com. Around 40% of the portfolio is invested in mid-cap firms, with 35% in small-caps.
While Japanese firms have not been known in the past for generous dividends, attitudes are changing. Six holdings, including Fuji Photos, recently unveiled share buyback schemes, while other holdings, including Japan Wool Textile, have enjoyed large unrealised gains on their property portfolios. Meanwhile, the fund’s management says that the recent stockmarket falls have created “some interesting stock opportunities”. The ongoing charge is 1.21%.
Contact: 020-7499 9980.
| CF Morant Wright Nippon top ten holdings | |
|---|---|
| Holding | % of assets |
| Kuraray | 2.9% |
| Mitsubishi UFJ Financial | 2.9% |
| Sumitomo Mitsui Financial | 2.8% |
| Paltac Corp | 2.7% |
| Kyowa Exeo | 2.6% |
| Mizuho Financial | 2.6% |
| Sekisui House | 2.6% |
| Sumitomo Mitsui Trust | 2.6% |
| Aoki | 2.5% |
| Fuji Media | 2.5% |