22nd May 2015 11:39
LONDON (Alliance News) - JPMorgan Japanese Investment Trust PLC's investment manager thinks it can use its base in Tokyo, Japan to its advantage, as the company Friday reported a double-digit total return in the first half of its financial year on a boost from a strong period for Japanese stock markets.
"At JPMorgan we have a large team based on the ground in Tokyo trying to identify significant changes in sectors and companies. Being based locally is unusual and we expect this to be a source of continued competitive advantage. Overall, we are positive on the outlook for the economy, market, active fund management and the performance of the company," Nicholas Weindling, investment manager, said in a statement.
Weindling said there has been "little change" to his outlook for the market or strategy.
"Overall, we continue to see the combination of political stability, policy support from the Bank of Japan, healthy corporate earnings and a recovering global economy as a powerful combination. We are encouraged by improvements in corporate governance so far. If these are long-lasting the market may re-rate," the investment manager said.
"We think the domestic economic outlook looks brighter than a few months ago. The tight labour market and higher corporate profits have already led to higher wages. Unlike last year this increase will not be soaked up by the consumption tax rise. It is also positive that oil prices are lower as it should mean higher disposable incomes. Lower commodity prices are a positive for Japan, although we are mindful this makes it harder to achieve the Bank of Japan's 2% inflation target. We also believe that the global economy continues to broadly recover albeit slowly,"
Weindling said.
The trust's net asset value rose by 28.6% on a total return basis in the six months ended March 31, while its benchmark TOPIX index rose by 17.2% in sterling terms.
"The outperformance versus the benchmark over the six months was due to both asset allocation and stock selection with additional outperformance coming from the effect of the company's gearing," Weindling said.
Shares in the trust were up 0.1% at 287.31 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
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