JO Hambro Capital Management (Johcm) is to launch the Japan Dividend Growth fund after predicting a ‘multi-year bull market’ in the country.
The Dividend Growth fund is set to launch at the end of March.
Unlike the group’s existing Japan fund, which has a pronounced small and mid cap bias, the new fund will be large cap-focused, so will have a much greater capacity of £5 billion. It will target a blend of dividend growth and dividend yield.
McGlashan has specialised in the Japanese stock market for 30 years and joined Johcm in 2004. He remains upbeat on the country’s outlook.
‘The Japanese market has had a huge rally over the past year, but we believe this is merely the beginning of a multi-year bull market,’ he said.
‘To date, the rally has been driven almost entirely by foreigners. However, we expect that domestic investors will play a bigger role from now. As domestic involvement increases, interest in dividends will grow.’
Nash added: ‘A dividend culture is emerging in Japan. While payout ratios in Japan still lag the global average, this is likely to change as companies attempt to cultivate long-term shareholders by increasing dividends.’
The existing JOHCM Japan fund has outperformed the Topix index over one, three and five years and over three years, it is 15th out of 65 funds in its peer group, returning 19.6%, compared to a 12.3% return for the index.