Licensed Custodian, Dealer and Financial Adviser.   CPFIS Registered Investment Administrator
  • Home
  • Research & Insights
  • FSM Webcast
  • Ask The Experts: Explaining the Top Picks of This Japan Equity Fund

Ask The Experts: Explaining the Top Picks of This Japan Equity Fund

Chern-Yeh Kwok, Head of Investment Management, Japan at Aberdeen Investment Management K.K., speaks to Fundsupermart about the portfolio allocation behind the Aberdeen Japan Equity Fund.

Japanese equity funds seem to generate a wide range of returns. For example, the three year annualised return of Japanese equity funds on the Fundsupermart platform ranged from -1.5% to close to 10%. Does this signify a more inefficient market and thus more opportunities for active managers like Aberdeen to exploit?
- All global markets have inefficiencies
- Most important thing is to look for good companies and to invest in them over the long-term
- Such an investment process should be able to generate better returns over time

The fund has a large allocation to the Consumer Goods sector at 28.9% of the portfolio. What are the reasons for this large weighting?
- In Japan, consumer goods comprise of a broad range of companies such as auto companies (Honda, Toyota), tobacco companies (Japan Tobacco) and infant product companies (Unicharm) etc
- Long-term shareholders of many of these companies mentioned previously

The top three holdings (Canon Inc, Shin-Etsu Chemical Co., FANUC Corp) on the fund as of its January factsheet are the only companies that have more than 5% allocation. Can you briefly explain the reasons behind these investments?
- Canon has shown over the years that they are able to make very good products
- In the digital SLR space, it is basically a duopoly between Nikon and Canon
- They also have a large range of lenses which make them a lot of money
- Canon also makes photocopiers and printers which are distributed globally and Canon is able to generate recurring income through the ink cartridges
- Shin-Etsu makes silicon wafers which feeds into semiconductors and other consumer products such as iPads and personal computers
- Operates in oligopolistic markets with a few big producers with pricing power
- FANUC makes robot arms or factory automation
- FANUC is also very good at computer numerical controls which is similar to an operating system for machine tools
- FANUC has a 60% market share in this particular market
- Also has strong balance sheet and attractive business models

All materials and contents found in this Site are strictly for information purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found in this Site. While iFAST Financial Pte Ltd ("IFPL") has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this Site is made on a general basis and neither IFPL nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase into are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the unit trusts and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our full disclaimer in the website.

Broadcast Date 22 March 2012
Video Duration 00:07:25
Programme Ask The Experts: Explaining the Top Picks of This Japan Equity Fund
0 Ratings Views: 2022 Language: English Comment (0)
URL : Bookmark and Share

Aberdeen Japan Equity

Switch to desktop view Switch to mobile view