They posted the strongest performance in the sector in 2009 but which Japanese equity managers have retained this performance three years on?
Top performing Japanese equity managers in 2009
Our latest analysis piece brings us up-to-date with 2009’s look at the stand-out performers in the Japanese equity sector and finds out who has held onto this stellar performance nearly three years on.
Out of a class of 181, there were 10 managers pinpointed for their strong total returns in this sector with Invesco’s Paul Chesson topping the leaderboard for his work on two Invesco funds.
Looking at the period from January 2010 to end of October 2012, we find a handful of fund manager changes and fund closures.
In some cases, such as with Chesson, there has been a new co-manager added, while other managers have stepped down.
For example, Nicola Maino no longer runs the Euromobiliare Japan Equity fund, which closed in February 2010, and Hidekazu Kishimoto passed away in January of this year.
Note: The funds have been charted against the average manager in the Japanese equity sector for the period covering January 2010 to October 2012.
Fukuo Shigeta, Nippon Finance
Recognised last time out for his performance across two Japanese equity portfolios, Shigeta has suffered like many of his peers over the intervening period.
The Tokyo-based investor has seen his Luxembourg-domiciled MMW Securities Fund – Nippon Equity Sub-Fund, which he runs on mandate for German firm Warburg Invest, fall below the average manager performance over the past 35 months.
Meanwhile, the Nippon Portfolio, which is domiciled in Austria and registered for sale in Austria, Switzerland and Germany, has posted a slightly stronger performance in relative terms. The fund has only lost 8.67% while the average manager lost 8.77%.
Michele Malingamba, BSI Bank
The Citywire A-rated manager has fallen a notch in their ratings since the first analysis piece in January 2010 but is among the relative best performers in this second piece of analysis.
Malingamba, who was also mentioned in our Star Tracker piece on emerging European equities, has lost 4.08% compared to a loss of 8.77% by the average manager.
He has run the Swiss-domiciled fund since January 1998 and follows a long-term, investment approach to Japan-based and Japanese listed companies, with risk management being a major element of his fund management style.
Heiko Breiholz, Hansainvest
Hamburg-based Heiko Breiholz is another from the original list of stand-out performers to have fallen off the ratings radar as of late, having lost the Citywire AA-rating he held in January 2010.
In his most recent factsheet for the HANSAasia fund, Breiholz shows a strong interest in Japanese consumer services, with this making up his largest sector allocation.
This is ahead of exposure to technology and consumer goods names. The largest holdings in the fund are automotive firm Toyota Motor (5.3%) and retail giant Fast Retailing (5.2%).
Citywire Euro Stars AA-rated duo Stephen Harker and Neil Edwards remain in the mix despite the decision to pull the plug on its SGAM mandate in June 2011.
Meanwhile, the pair added a new manager to its Dublin-domiciled flagship fund in March 2011, when former TCW colleague Jeffrey Atherton was brought on board. The fund was closed to new investors in March 2012 but was re-opened this month.
In the 35 month period since the previous analysis, Harker and Edwards have remained vocal on issues such as the impact of the Japanese earthquake on performance.
The duo remained fully invested through the recovery phase despite having major holdings in East Japan Railway and Tokyo Electric, both of which saw dramatic falls in their share price in the aftermath of the natural disaster.
Nathan Gibbs, Schroders
Another fund manager recognised for his outperformance across two strategies, Schroders’ Euro Stars AAA-rated manager Nathan Gibbs has kept broadly in line with the average manager performance over the past 35 months.
Looking more closely at the Schroder ISF Japanese Equity Alpha fund, Gibbs said he has sought to exploit inefficiencies in the Japanese market. This has seen him adopt the view that bad news in the Japanese equity market is already over-discounted.
Gibbs, who previously said the crisis in Japan’s industrial sector will get worse before it gets better, is a firm believer that the Japanese picture as a whole is misunderstood. He runs a widely diversified portfolio which is mainly invested in electrical appliance names.
Frank Lingohr, Lingohr & Partner
Polymath Frank Lingohr is the best performing of the seven managers in this catch-up analysis piece, having lost almost 5% less than the average manager.
This is an improvement in his ranking from the previous analysis, where the Euro Stars A-rated Lingohr was second only to Paul Chesson for his performance on the HSBC Trinkaus Japan INKA fund.
The largest sector exposure in the €4.78 million fund is to chemicals, which make up 19% of the portfolio at present. This is ahead of industrials (17%), automobiles (7%) and technology (7%).
Paul Chesson, Invesco
Euro Stars A-rated manager Paul Chesson has had a busy period since the previous analysis. First off, he had first-hand experience of the Japanese earthquake – which he documented for Citywire – and was then joined by co-manager Tony Roberts.
Another manager running two funds, the larger of the two – the $224 million Invesco Japanese Equity Core fund – has lagged the average manager during this period. Here Chesson and Roberts lost 27.14%, while the average manager lost 8.77%.
Chesson and Roberts have taken large overweight positions in financial and technology stocks. Due to the slow earnings recovery, the pair said they have added to their export opportunities through electrical appliance and automotive names.