- We hold a positive view on Japanese equities in 2022 given the steadily improving macro backdrop, supportive policy direction, rosy earnings outlook, attractive valuations and positive corporate governance changes.
- There is a strong case for active investment in Japan due to (i) a wide universe of high quality mid to small-cap names, (ii) the nature of being under-researched, and (iii) the benefits of security selection in Japan’s leading industries.
- The JPMorgan Japan Equity Fund is our recommended fund. The fund focuses on high conviction ideas in Japan and utilises a bottom-up approach, focusing on the economics of the business, sustainability of value creation, governance, risk, liquidity, and expected return.
- The fund has been a very strong performer against popular Japanese equity strategies and the benchmark since the fund’s inception. Leveraging on structural growth opportunities, the fund has an established record of picking quality companies within Japan’s fast-growing industries.
Japan to play catch-up with global peers in 2022
Chart 1: Japan equities index price and projected EPS growth
The case for active investment in Japan
Chart 2: Wide return dispersion within Japanese equities, especially in the recent five years.
Chart 3: Coverage for Japanese companies are the lowest amongst the DM space
JPMorgan Japan Equity Fund: Our recommended Japanese equity fund
What we like about the fund
Chart 4: Fund has consistently outperformed its peers and the benchmark
Chart 5: The fund is invested in structural growth themes
The Research Team is part of iFAST Financial Pte Ltd.
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