Mike Lindsell proposes an original approach to invest in Japan, in order to benefit from the expected recovery of the market. He picks companies offering a franchise and a strong business model, companies that are sustainable and undervalued. The quality of the balance sheet and the offered return are essential requirements in the stock picking process.
For the last 10 years, dividends have gained an always increasing significance for the total return of the Japanese stock market. According to Michael Lindsell, the decrease in cross holding and the growing number of foreign investors in Japan bring our attention to the shareholder returns. We can remind that Japanese shareholders always had slighter returns than their European or American counterparts.
Moreover, the enduring ageing of the population reinforces the necessity of a high level of return from the saving-scheme (most are invested in short term deposit account, with a low level of return). Shares will become an increasingly important investment alternative for the Japanese savers.
The “Close Finsbury Japanese Equity” portfolio displays all the characteristics of a fund which can offer a higher return than the regular Topix benchmark. The stock picking process aims to invest in exceptional businesses offering : a good potential return and the ability to preserve capital in case of a market correction.
