The OYSTER Japan Opportunities fund has posted an excellent performance over the last three years: +80.1 per cent versus +64.5 per cent for the Topix Total Return and +57.1 per cent for its peers, placing it in the first decile of the Lipper ranking.
The fund’s flexible investment style has allowed its volatility to be among the lowest of its peer group and to exhibit an asymmetrical return profile. On average, the fund falls less than the market while also benefiting from a rising market. The fund therefore offers a real alternative to passive management and posts more consistent performance over the long term than the growth or value approaches.
In spite of the expectations created by Abenomics, the Japanese economy treaded water in 2015, once again confirming the challenge of achieving a sustained rebound. Over the past three years, in contrast, the Japanese stock market has been of the best performers worldwide, driven by a strong growth in corporate earnings. While the yen’s weakness over the last three years has had a positive impact on export companies' results, it is not the only explanation behind this positive trend.
According to Joël Le Saux, head of the OYSTER Japan Opportunities fund, listed companies' profitability has been significantly boosted by a refocusing on key hubs (large cities) as well as restored pricing power thanks to reduced surplus production capacity. During his recent trip to Japan, Le Saux also emphasised the benefits of labour shortage and declining unemployment, two positive factors stimulating consumption. Another positive theme he has identified and invested into through the fund is a growth in international tourism into Japan, driven by the weak yen.
