As a group, Flemings has strength across the globe. Forsyth Partners admires the group's expertise in...
Its Asian expertise, under the auspices of Jardine Fleming, provides investors with a wide variety of regional and single country fund options that invariably produce outperformance in bull markets. In particular, we expect Flemings' successes in Japan to continue in 2000 as the group has one of the biggest research teams in Asia.
Simon Jones, manager of the Fleming Flagship Japanese fund, argues that the inefficiency of the Japanese market guarantees that many of the growth opportunities have been ignored by the investment community. He points out that a grinding bear market that has now lasted for nearly 10 years has resulted in a significant reduction in the number of analysts on the ground covering anything other than the largest liquid stocks.
This is the opportunity, because western style research on the corporations of tomorrow continues to add significant value in stock selection. More importantly, domestic investors have grasped this concept and have been willing to commit to these high growth stocks to the exclusion of all others.
Investors who believe that the 'new Japan' story has some way to go before it tops out should consider backing Jonathon Dobson, manager of the JF Japan OTC Trust and a senior member of the small cap team in Japan. Dobson continues to be bullish on the prospects for this and other similarly mandated funds. He argues that many investors are missing the real opportunity in Japan.
A new breed of entrepreneur has emerged. They are generally a self-starter, are likely to be under 40 years old and will be heavily invested in their own business franchise. Dobson argues that the future for Japan will be represented by service companies, internet based stocks, computer outsourcing, niche retailing and aggressive M&A corporations.
He contends that few, if any, of the stocks he is currently holding are approaching full value. His reality check remains the Peg ratio, and here he has a great degree of comfort that his portfolio has further to run. Dobson aims to keep the Peg as close to one as possible and points out that the sheer rate of earnings growth allows him to hold stocks that might seem superficially expensive.
In terms of portfolio structure, this and other OTC-based funds in Jardine Fleming continue to hold a concentrated stock portfolio of between 25-20 stocks, with the top 10 accounting for 79% of the total portfolio.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation