By Leo Bland Credit Suisse Asset Management is to run a 45 stock portfolio for its Japan Oeic fund t...
By Leo Bland
Credit Suisse Asset Management is to run a 45 stock portfolio for its Japan Oeic fund to be launched later this year with a focus on technology stocks.
The fund is to be run by Nicholas Edwards, a Japan fund manager at US investment management group Warburg Pincus Asset Management, which was acquired by the Credit Suisse Asset Management last year.
Edwards will run the portfolio from New York and the fund, scheduled for a mid-May launch subject to regulatory approval, will mark the first UK retail venture between Credit Suisse and Warburg Pincus. The Oeic will be benchmarked against the Topix index.
Edwards said: "When we look at investing in a company we ask ourselves the question 'if you had to buy the whole company would you still invest?' Each individual stock in the portfolio will fit in with our view on Japan. We spend a lot of time meeting the management of companies, building a model of the firms and working out a fair value for stocks.
"I did around 600 company visits in Japan last year and the three other members of my team probably did around 1,200. We look to meet all of the companies that we hold at least once a quarter."
Key holdings in the fund will include Softbank, Sony and NTT Mobile Communications. Sony is on a P/E of 824.45 times earnings and has seen its share price fall by 17.15% in yen terms in the period between 1 March and 16 March this year. NTT Mobile Communications has seen it share price fall by 2.27% in the same time period. The stock is on a P/E of 324.39 times.
Edwards is bullish on the prospects for the Japanese economy particularly in terms of capital spending in technology. Edwards expects the economy to deliver 2% growth this year and is also confident that many corporations in Japan have realised the need to restructure and focus on delivering higher returns.
He added that another factor which will help support the Japanese market is the level of liquidity which should increase during this year. Around ¥106 trillion in 10 year savings deposits is set to mature in April, and Edwards believes that between 10% and 25% of this could be invested in the Japanese stock market. This compares with net inflows of ¥7 trillion into Japan from foreign investors last year.
Edwards already runs a Japan growth fund and Japan small cap fund for Warburg Pincus. He has worked at Warburg Pincus since 1995 and was previously a director at Jardine Fleming Investment Advisers in Tokyo between 1984 and 1995.
As previously reported in Investment Week, the Japan fund will be included in the Credit Suisse international Oeic along with its European, Transatlantic and Orient funds. The group's Oeic conversion is set to go through in April.
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