With Japan having one of the strongest balance sheets of any market globally, CAMRADATA’s latest white paper, Japan Equity explores the opportunities for investors as global economies start to emerge from the pandemic.
The whitepaper includes insight from firms including Asset Management One, Sparx, Tokio Marine Asset Management, Barclays Wealth Management & Investment, Psigma Investment Management and Stanhope Capital, who attended a virtual roundtable hosted by CAMRADATA in July.
The report highlights that with the pandemic accelerating digital transformation and the adoption of technology, Japan is at an interesting crossroads. Japanese tech companies are poised to benefit from a doubling in demand, but at the same time cannot afford to be complacent as China is rapidly closing the tech gap.
Natasha Silva, Managing Director, Client Relations, CAMRADATA, says: “Whilst the pandemic is certainly not over from a societal perspective, from a stock market perspective – which tends to look six to nine months ahead – it is, particularly as the global economy shows signs of improvement.
“Japanese earnings are the most correlated to global industrial production of any region, so the prime time to own this market is when the economy is improving because the operating leverage is large and underestimated. Japan offers interesting return opportunities for investors.”
The CAMRADATA roundtable discussed how wealth managers allocate to the world’s third-largest economy and third-largest stock market and whether fund selectors preferred managers of Japanese equities to be based in Japan or at least understand Japanese culture and language. Some of the firms said they employ local portfolio managers but said this wasn’t necessarily crucial. Other discussions focused on ESG and how it is impacting investment decisions.
