JOHCM launches Japan dividend fund for McGlashan

JO Hambro Capital Management has launched a Japanese large cap fund for veteran manager Scott McGlashan which is designed to exploit the growing dividend culture in the country. 

The JOHCM Japan Select fund, managed by McGlashan and his co-manager on the existing JOHCM Japan Retail fund Ruth Nash, will use high yield and dividend growth stocks as an indicator of potential.

The company emphasised that it did not expect the fund to be used as an equity income mandate however, with a forecast annual yield of just 1.9%.

It said that changing attitudes among Japanese investors meant that rising pay-outs were often rewarded by the markets, offering a useful indicator for capital growth.     

McGlashan said: ‘Dividends by Japanese companies grew by 14% last year and have been growing at a double-digit rate since 2003.

‘In the 10 years prior to that, it was common for them to cut dividends. The emerging dividend culture will be the foundation for the next Japanese bull market and this fund is positioned to benefit from this exciting change.’

The fund will invest in 40 stocks, the 20 highest dividend shares and another 20 showing the highest level of dividend growth. 

Even allowing for his commercial interest in investment in the region, McGlashan is a committed bull on Japanese prospects.

Speaking to Citywire in July, he said that he believed that Japanese equities had the potential to return 30% to investors over the next year and that the country was on the cusp of a multi-year bull run, once international credit crunch disruption subsided.