In a further sign that Australian investors are ready to take another look at Asia, BT Funds Management (BTFM) will roll out a specialist Japanese share fund today.
In a further sign that Australian investors are ready to take another look at Asia, BT Funds Management (BTFM) will roll out a specialist Japanese share fund today.
BTFM currently offers access to the Japanese market for individual institutional investors but the new fund is the first focussed Japanese retail fund offered by BTFM.
Initial investment in the fund will be $5000 with three per cent entry fee and management fees of 1.5 per cent.
Benchmarked to the MSCI Japan Accumulation Index, Head of retail at BTFM, Rob Coombe, says the fund is the result of the changing economic and fiscal environment in Japan.
“There is long term change occurring which is leading to value for customers as the breakdown of the stakehold system occurs and management becomes more accountable and aims to return value to shareholders,” Coombe says.
“To put it into perspective, Japan can be compared with Europe five years ago. European pension funds were also underfunded and moved to growth assets which drove demand. The same is happening in Japan.”
However Coombe doesn’t see the changes and possible growth as a passing fad but rather believes investors should look medium to long term.
“We are looking at five year returns to properly see this thing out as the story in Japan has a significant amount of investment within it,” Coombe says.
“The fund was launched because we felt the story was so good that it was time to give exposure to the retail market.”
Other fund managers have also acted on the opportunities offered by Japan. Coombe says there are four or five other funds in the market but inflows have been limited, because with the exception of last year, returns have been ordinary.
“It is hard to put a target on returns even when taking into consideration that the Japanese sector of BT’s International Fund returned 38 per cent per annum compared to the MSCI Index of 16 per cent. There is a significant value add but these are historical returns so it is still hard to pick,” Coombe says.
“Japan as a stand alone in the Asia region is a huge market, with a gross domestic product (GDP) larger than the rest of Asia combined.”
