Fund performance
The Polar fund generally performs well when the market is driven by fundamentals. In contrast, the Man GLG Japan fund takes significant stock and sector bets, which boosts fund performance when the stocks or sectors outperform.
A look at the performance of both funds:
Source: FE Analytics
A look at their cumulative performance (as of 30 September, 2015)
| 3 months | 1 year | 3 years | 5 years | |
| Polar Capital Japan | -2.42% | 6.23% | 29.21% | 30.21% |
| Man GLG Japan | -7.92% | 17.24% | 141.64% | 100.22% |
Source: FE Analytics
The Man GLG fund has clearly outperformed the Polar fund during one-, three- and five-year periods, though it had higher volatility.
Commenting on the Polar Capital fund’s performance, Ang said that its 3-year and 5-year track record outperformed its reference index. This is because the fund was deliberately overweight in sectors that benefitted from Abenomics, such as manufacturers that export and financials. Ang noted that the product is underweight commodities and defensives.
For the Man GLG Japan fund, Ang said that the fund’s bet on banks and financials paid off.
“GLG [made a call] to retain an overweight on financials and banks (10% over the benchmark). Iron and steel and wholesale trade accounts for the second and third largest allocation of its fund, respectively,” Ang said.
A look at the volatility of both funds:
| Polar Capital | GLG Japan | |
| Volatility | 15.40 | 21.12 |
| Beta | 0.93 | 1.14 |
Source: Coutts, FE Analytics
Ang noted that given the Man GLG fund’s relatively small number of holdings and long-term investment horizon, the fund will have a high tracking error when measured against the benchmark. She said that this is similar for the Polar vehicle, but the fund controls its volatility by holding a larger number of equities.
Manager review
The Polar Capital fund’s lead manager, James Salter, joined the firm in March 2001. Salter is also co-manager of the Polar Capital Japan Alpha Fund.
He began his career at Foreign & Colonial in 1989 where he was promoted to an assistant fund manager, and then left to join Martin Currie to take joint responsibility for the Japanese funds.
Gerard Cawley, the fund’s deputy manager, provides direct support for Salter. He is experienced in analysing Japanese equities. Previously, Cawley worked at Schroder Investment Management on the Japanese equity team for five years.
