Sumitomo Mitsui Trust Group (SuMi TRUST) has launched new Japanese equities UCITS funds. The Sakigake High Alpha – Japan Thematic Growth and the FGS – Japan Strategic Growth, are now available for international institutional investors with adherence to the UCITS format. Both underlying strategies have a track record of over 15 years as Japanese domestic investment vehicles and their current strategy AUMs are both approximately USD 1 billion. Performance will be benchmarked against TOPIX. The funds offer JPY as well as USD hedged and EUR hedged share classes, and have an initial capital of USD 20 million each.
The Sakigake High Alpha – Japan Thematic Growth – from the Japanese term “Sakigake” for pioneer or a things/people ahead of the curve – adopts a mixture of thematic top-down and fundamental research bottom-up approach to stock selection. It invests in carefully selected large and mid-cap Japanese companies, with strong mid-term earnings growth, which benefit from social and industrial changes in the country, such as the increase in automation and growth of e-commerce. Its top holdings include Tokyo Electron Limited, a leading Japanese electronics and semiconductor company, and Keyence Corporation, which develops and manufactures automation sensors, such as vision systems and barcode readers. The fund is managed by Katsunori Ogawa, Chief Portfolio Manager, and Yoshiaki Segawa, Senior Portfolio Manager, both based in Tokyo.
The FGS – Japan Strategic Growth fund comprises Japanese companies which serve the product and services markets, such as the industrials and materials sectors. Through a stock picking approach which analyses demand and supply shortages as key growth drivers of a business, the fund’s strategy aims to find companies which are able to generate value-add in the supply chain. The portfolio comprises a selection of between 30 and 50 stocks – including the largest chemical company in Japan, Shin-Etsu Chemical, and construction equipment manufacturer Komatsu – with the aim to achieve sustainable long-term growth. Nagato Kimura is the Chief Portfolio Manager for this strategy and he is based in Tokyo.
In addition, due to overwhelming investor appetite SuMi TRUST has also introduced a new UCITS Japan Small Cap II (JSC II) fund which is a sister fund of the current Japan Small Cap (JSC) fund and invests in small cap stocks with high growth potential. Its portfolio comprises more liquid stocks than the JSC fund and offers lower investment management fees.** The Japan Small Cap (JSC) fund currently has over USD 520 million AUM as of the end of May 2018.
Yukihiro Murota, Managing Director of Sumitomo Mitsui Trust International, says: “Quality Japanese companies that are able to generate consistent and mid to long-term growth have increasingly become a sought-after investment for global institutional clients, attracted by the strong performance of Japanese equities. Our new funds are a direct response to this burgeoning demand, which is set to continue as the country undergoes further economic, social and industrial changes.
“Our expert investment teams based in Japan, with unrivalled on-the-ground equity knowledge, will be able to select the best stock ideas for our global client base and provide them with unparalleled access to a market which offers untapped opportunities for profit and growth.
** Early bird share class will be available for this fund.