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Fund of the Week: trusting in Japan for my pension

The GLG Japan CoreAlpha fund, run by Stephen Harker, Neil Edwards and Jeffrey Atherton, has been through a rough patch, but its long-term figures are highly impressive.

Fund of the Week: trusting in Japan for my pension

If your pension is anything like mine it has suddenly started to look a little rosy.

After what has felt like an interminable period I am finally back in the black. 

Such is my scepticism I do not think it will last for long. However, I am very interested in the performance of one of my holdings: the GLG Japan CoreAlpha fund run by Stephen HarkerNeil Edwards and Jeffrey Atherton. It is fair to say that their deep value, contrarian style has not had a good time of late, and the fund sits bottom of the group over short periods.

This, though, is uncharacteristic for a fund with extremely good long-term numbers.

I believe that Japan has a lot going for it, it's cheap, it sits in the fastest growing region on the planet, and its currency has to weaken at some stage. This is a punchy call as it has had many false dawns over the years, but I feel that the third-largest economy in the world might well be in for a purple patch.

17 comments so far. Why not have your say?

Mario via mobile

Oct 28, 2012 at 08:34

Not again!

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David Meyer

Oct 28, 2012 at 09:33

Time to dump Japan, then....

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Martin Baron

Oct 28, 2012 at 09:46

Is this the same new dawn trotted out at the start of the year? I looked at my pension yesterday and GLG Japan is firmly in the red 19% down so how many years before these great opportunities mean I can break even an sell ?

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Maverick

Oct 28, 2012 at 10:44

Isn't it wiser to wait till you're sure the recovery has started before you invest?

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Ian Burgess

Oct 28, 2012 at 11:28

Well i sincerely hope it's doing better than my Neptune Japan Fund. I put £1000 into it on the hope of a recovery after the tsunami - but no such luck. Just waiting to get my money back before I cash it in.

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hooligan

Oct 28, 2012 at 11:54

let's see..trouble over the years at the fun dmanager, fukushima still melting down, massive trade deficit as a result of disputes over islands with China, government debt to GDP of over one quadrillion yen, an aging population requiring capital drawdown right now...yep..this guy is an alien (and not guy hands either).

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Rob guy via mobile

Oct 28, 2012 at 12:57

I've been thinking god a while abt moving into this fund, but ever time I 'get close ' to putting £££ in, I can't see GLG Japan out pacing my othe Asia funds, sorry I'm still not convinced abt Japan, I think the key reason is lack of dividend payment form Japan Co's, at least the Asia Co's have growth on their side

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Jonathan

Oct 28, 2012 at 13:14

Don't you know: Past Performance is Not a Guarantee of Future Returns

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Ines

Oct 28, 2012 at 13:33

'contains forward looking statements' etc.

Anyone got any thoughts about Aberdeen New Thai Investment Trust? Small, but seems to have done well over the past 3 years and still at a big discount to NAV.

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Richard Gabb

Oct 28, 2012 at 18:57

Perhaps the performance of Legg Mason Japan Equity answers the question about investing in Japan for the "long term" - down 55.4% over the last 13 years - and guess who keeps taking their 'management' fees :-)

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hooligan

Oct 28, 2012 at 21:30

cry "shogun" has been shouted so many times, here's a chart of the Nikkei 225 for the last 30 years.

http://www.forecast-chart.com/historical-nikkei-225.html

it is back to 1985 levels so thats thirty years of zero.

5% compound return would barely compensate for the 20% p.a. or so of risk, but if you believe that Japanese corruption and decay is simply a bug that will always avoid the windshield and turn into a magnificent dragon, the 5% compound return for 30 years means the Nikkei "should" be at its all time high of c. 39,000. Of course, any long term investor in the Nikkei knows that this level can only be achieved if the yen is valued where it should be, i,e. somewhere soemthing like 550 yen to the pound (from c.128 currently). I sincerely hope anyone taking a view on the Nikkei hedges the currency risk. As for the ability of GLG in this space, I am not sure that I would value its ability over and above anyone in this space, especially after fees, expenses, custody charges etc etc etc...bleh!

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Jezzer

Oct 29, 2012 at 14:13

Chaps, I bought into the Japanese smaller company investment trust run by Baillie Gifford (BGS) a few years ago and loaded up some more just after Fukushima, at about 140p. It's now hovering around 200p and still cheap by most measures, so don't write off Japan completely...

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Franco

Oct 29, 2012 at 14:20

I wonder how much the going rate is for promoting Japan these days.

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Jezzer

Oct 29, 2012 at 14:35

Judging by the sentiment on this thread, I think I'll buy some more!

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hooligan

Oct 29, 2012 at 15:44

Good luck Jezzer. I am sure they have a small company building a bridge to a radioactive fish hatchery as we speak!

I am curiuos as to why you are so keen on Japanese equities with Baillie Gifford, rather than, say, stocks in Greece or Venezuela or Botswana with, say, Aberdeen or perhaps more appropriate, smaller companies in Britain, Norway or Singapore with fund managers like Aberforth or Skagen or Flag Capital? Or even look for private equity/venture capital/leveraged US Agency MBS?

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Broomtree

Oct 29, 2012 at 19:44

I have been in this fund for a number of years and I still believe it will pay eventually - That said currently down 18% almost as bad as my Natural Resources and Gold funds. However decided to reduce my exposure recently and moved some of my Japan money to Legg Mason Japan - I note Richard's longer term comments above but in a couple of months this fund is up 14% so it appears to be providing some balance.

Interestingly my portfolio moved into the black again this month also!

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Wally Thrower

May 15, 2013 at 12:00

Have just listened to this video (May 2013) and I hope all of you who rubbished the article in October have now changed your minds!

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