Having retained three longstanding themes – big overweights to financials, large caps and growth companies – Atherton was so convinced by the value available in the ‘deep cyclicals’ space that, following investments in Nippon Steel and other areas such as shipping companies and trading houses, his Chinese deep cyclical weighting now represents around 27% of the fund – on a par with his financials weighting.
“Japanese commodities and China-related stocks have been beaten up in the last few weeks, and they are as cheap as the consumer electronics names were in 2012,” he explained.
“Every Japanese manager wants to exhibit the ‘Abenomics’ theme in their portfolio and will not have any China-related stocks in their top 10 – the real contrarian trade is for Japanese managers to go back into China-related stocks.”
