Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Abenomics will fail but equities can succeed anyway says Hendry

Hugh Hendry, the Eclectica hedge fund manager, has said his scepticism on Japanese monetary policy has not prevented him from running a long in the market as his 'wild bullish card,' as he anticipates a further rise in asset prices.

'It is our contention that Japan's long spell in the sin bin has left its society particularly vulnerable to the charms of a radicalisation of monetary policy,' the manager said in the December commentary of the Eclectica fund.

He argued that the nation 'will struggle to produce the incremental GDP necessary to service and repay its gigantic sovereign debt load,' which will force the central bank to push for inflationary price targeting, pushing up asset prices. 

'You should buy Japanese assets if you fear that Abenomics will fail to restore the fortunes of Japan (which it probably won’t),' the manager said.  'Want to make real money? Make it in Japan.'

Following what he described as his 'mediocre investment performance' the manager said he is 'no longer the last bear standing,' as central banks continue to print money to prop up the global economy.

'I’ve been sensible. But in doing so I have imposed qualitative, one-way causality arguments onto a market that just doesn’t care,' the manager explained, adding that he could no longer wait for the market to fall. 

'Only a foolish investor would stand in the way of this bull market...it’ll crash of course, just not for a while,' he said.

The Japanese market has rallied sharply this year after its government introduced aggressive monetary policies, including targeting 2% inflation and quantitative easing, although it pulled back following the global 'taper tantrum' caused by the US Federal Reserve in April.  

Over the last three years Hugh Hendry has returned 7.9% versus an average Alternative Ucits - Global Macro return of -0.4%. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Play Carmignac's Crowl: what QE could mean for Europe

Carmignac's Crowl: what QE could mean for Europe

The ECB is widely expected to finally fire its QE gun this week. Carmignac's Sandra Crowl discusses the implications for the eurozone.

Play Grexit worries, currency wars and a grizzly outlook for 2015?

Grexit worries, currency wars and a grizzly outlook for 2015?

The first Investment Pulse of the year looks at the potential impact of Greece leaving the euro, volatility in currency markets and the UK’s economic prospects.

Your Business: Cover Star Club

Profile: DIY investing is biggest threat to industry, says Whitechurch

Profile: DIY investing is biggest threat to industry, says Whitechurch

The industry is at risk of pushing potential investors down the DIY route unless it does more to make its services accessible says the Whitechurch Securities boss

Wealth Manager on Twitter