Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. 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 Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter