JAPAN - Japanese equities will provide strong returns for pension schemes, leading fund managers claim.
JPMorgan Fleming Asset Management estimates earnings of blue chip stocks listed in the Tokyo exchange could be up 25% this year – well ahead of their UK and US peers.
Last year Japanese equities returned their first positive returns since 1999 with the economy benefiting from a cyclical upturn in domestic demand as well as strong interest from the US and rapid structural growth in China.
JPMorgan Fleming’s Japan portfolio group manager, Stephen Mitchell, said: “Macro data continues to improve, while corporate restructuring is delivering enhanced profits and positive cashflows.
As China develops it is turning to Japanese companies for the supply of everything from new factory equipment to consumer products like cars and cosmetics – there is certainly a strong case for investing in Japanese equities.”
Britannic Asset Management head of Japanese equities Natasha Chetwynd was also bullish on the sustainability of the current economic recovery.
She points to asset price inflation as a positive indicator, with property prices – which have been falling since the late 80s – starting to rise. She also says there is increased demand for Tokyo condominiums and office space.
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
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