Despite a few wobbles of late, BNY Mellon reckons that Japan's push to get away from decades of stagnation should bear fruit, which is why it is keeping faith in the country's equity market.
While still relatively unloved and under-owned, Japan is looking to pick up in the coming years and catch up on the global earnings recovery. As such, now is the time for investors to buy Japan, as the potential for earnings per share growth is looking greater than ever, said BNY Mellon’s Japanese equity investment team at a recent roundtable in London.
Miyuki Kashima, head of Japanese equity investment at BNY Mellon Asset Management Japan, announced the launch of two Japanese equity funds, the Japan All Cap Equity fund and the Japan Small Cap Equity Focus fund, which are both domiciled in Dublin, with share classes available at an annual management charge of 1 per cent. Read more on the launch, here.
Giving a broad overview of the Japanese economy, Kashima explained that the launch follows her having “never felt this positive for the long term” during her near-30-year career running Japanese equities. She argued that even given last year’s equity rally, which saw the Topix index gain more than 50 per cent in local currency terms, the market was a long way off its peak.
“The market hasn’t caught up to the earnings recovery since the financial crisis,” Kashima said, adding that she expects a 10 per cent growth in earnings in the coming financial year.