The F&C team has an overweight to Japan in place and Spencer said the Toshiba case does not significantly change this thinking. He acknowledged however, that if there were to be a string of further cases that would then become a big concern.
Spencer also noted that in a case like Toshiba it is more of a problem for passive investors because the company makes up a large proportion of the index, whereas active managers can side-step big companies if they have doubts about them.
Only time will tell whether other leading Japanese companies have engaged in similar accounting practices to Toshiba or whether it is an isolated rogue case, but investors who have piled in over the past year will be sitting a little less comfortably than they were yesterday.
