japanese stocks at steal levels

Over the next decade Japanese equities will offer investors the best bet for making money, according to PSigma’s Tom Becket.

japanese stocks at steal levels


In a meeting to announce the renaming of his fund to the PSigma Dynamic Multi-asset fund, Becket said that if anything was going to make investors money in the next 10 years it would be Japan.

"Everyone hates Japan," he explained, "It’s undervalued and under-researched, so we have been increasing our exposure to it. The upside potential is 100% of the index’s current valuation, while the downside potential is only 10%."

Becket’s fund is currently neutral equities, with a 50% position that is smack bang in the middle of his 40% to 60% range.

He said the recovery potential of Japan is particularly attractive because the valuations are not prohibitive and in some cases are at "steal levels".

"Dividend yields remain very attractive when compared to insanely low bond yields and we believe that patience will be rewarded. Sadly at the moment patience in markets is at unprecedentedly low levels. This to us is an opportunity," said Becket.

He accesses the Japan story through the MFS Global Equity fund, M&G Global Basics fund and Jupiter’s Japan funds.

Another Japan bull is Simon Gibson, director at Atkinson Bolton, who put the country in his top three growth sectors over the next year, along with high yield bonds and Russian equities.

Gibson said Japan was reasonable value and that it was attractive especially given its what the country has gone through over this year with the tsunami and ensuing nuclear disaster.

On the basis that he prefers not to make too many changes to clients’ portfolios in the medium term, Gibson said his conviction for Japan, Russia and high yield bonds would stick over a three-year period too.


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