Manager Hideo Shiozumi attributes some of his strong performance through these volatile weeks to his position in small and mid-cap internet stocks, accounting for more than 50% of his fund. The £63m all-cap fund has a bias to small and mid-sized companies, with almost 25% of the portfolio currently invested in firms between £100m and £300m in size.
He said: “Although we don’t expect much improvement in the market overall over coming 12 months, we expect a very strong performance for Japanese mid-sized growth companies, which could become the best performing market in the world. Investors’ attentions should continue to shift to small/mid cap growth stocks, which majorities are in domestic sectors, from larger caps as these are less impacted by external factors.”
Shiozumi believes Japan has been well situated to benefit from technological developments. While he noted more and more Japanese are using the internet, including businesses, its usage has accelerated since the March earthquakes.
“Individuals rather spend their time at home on shopping online where they can find less expensive goods and services with good quality than going out,” he noted. “Business corporations have also begun to be aware of the importance of IT and initiated to install more efficient IT infrastructure, i.e. cloud computing, which allow employees to work off-site.”
Shiozumi said he remains excited about the prospects for internet-related companies, which he expects will go on to perform strongly in the coming months. At the same time he believes export-oriented manufacturers will continue to suffer from the appreciation of the yen and the global economic slowdown.
