J O Hambro Capital Management launches Japan Dividend Growth Fund

The investment management boutique J O Hambro Capital Management (JOHCM) has announced the launch of the Japan Dividend Growth Fund on Monday, 31st March.

The fund will be managed by the Japanese equity investors Scott McGlashan and Ruth Nash (pictured), targeting Japan’s growing dividend culture. The fund is a large cap product, it has been launched in addition to the existing JOHCM Japan fund, which has a small- and mid-cap bias.

The new fund will incorporate a blend of dividend growth and dividend yield, with its performance being measured against the Topix 100 Index. Fund managers will screen the top 200 stocks by market capitalisation, no less than half of the fund will be invested in Topix 100 stocks. 

The aim of the fund is to take advantage of the changing macroeconomic environment in Japan, which has been facing a long term struggle against deflation. Bank of Japan governor Haruhiko Kuroda last year introduced aggressive monetary easing to combat deflation.

Yet the launch comes at a challenging time. While Japanese stock markets reported the biggest gains in 40 years in 2013, there has recently been a rush to sell Japanese stocks.

Nevertheless, Scott McGlashan expresses confidence about the long term prospects for equities in Japan: “Twelve months ago, this launch would have been not controversial at all, but the recent rush to sell has actually been a better time to launch a new fund.”

As Ruth Nash reaffirms, the launch for the fund has been based on a broader macro analysis, taking into account the negative bond yields and a growing long-term demand for equities in Japan. She adds: we are also going to incorporate buybacks into the portfolio, Toyota has just announced a buyback of shares worth $3.5bn, which is a very good signal for the rest of corporate Japan”.

The new fund will be available to investors via JOHCM’s Dublin-registered OEIC fund range.

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