John Chatfeild-Roberts has bought property for the first time in more than 10 years in the latest round of changes across his Merlin fund range.
In an update to investors, Chatfeild-Roberts said he was drawn to property for its income qualities. To tap into this he has bought the Mayfair Capital Commercial Property Trust through his Jupiter Merlin Income and Merlin Balanced Portfolios.
'We have a high conviction in the strength of the fund management team at Mayfair and believe that in the current environment, selected property exposure is a potential alternative for investors seeking diversification away from equities and bonds for income generation,' Chatfeild-Roberts said.
Meanwhile, Chatfeild-Roberts expressed concern about the impact of the sales tax increase following a disappointing first quarter, which saw the Nikkei fall by around 9%.
'A member of the Jupiter independent funds team spent a week in Tokyo in February, accompanying managers at company meetings and attending a regional conference,' he said.
'It was quite apparent that the 3% sales tax increase (VAT equivalent) in April has prompted consumers to accelerate their retail purchases and that the public resent tax rises when their wages are lower (in real terms).'
Chatfeild-Roberts added that while the job market is indicating a more reassuring picture against the backdrop of ongoing stimulus, the political uncertainty gives cause to be wary.
'Investors question whether the Third Arrow of deregulation is dying a slow death in Japan’s labyrinthine and somewhat dysfunctional political system,' he said.
'Furthermore, Japan’s net exports have yet to expand, despite a weaker yen. Exposure to Japan has been reduced to a more neutral stance across the board.'
Analysts have suggested the government's decision to scrap the requirement to buy an annuity on retirement could present an opportunity for wealth and fund management firms offering multi-asset income propositions.
While Chatfeild-Roberts did not explicitly describe the pensions revolution as an opportunity for firms like Jupiter, he indicated the move potentially opens up a whole new client base.
'From our perspective, new legislation allowing pensioners to invest their own pension pot rather than purchase an annuity, impacted those of our equity managers who owned UK life insurance companies, as these share prices fell sharply,' Chatfeild-Roberts said.
'Longer term, we believe it is likely that pensioners will seek income-producing assets for their pension savings.'