Manager review
Nicholas Weindling and Shoichi Mizusawa have been co-managing the JPM fund since 2007, and Miyako Urabe started to take on the co-manager responsibility in September 2015. “Weindling is the key manager of the fund, and he is a fluent Japanese speaker who has been living in Japan for over a decade. He is a person with high conviction, who has been showing strong ability to identify thematic ideas, and to build portfolios that are highly differentiated from the benchmark TOPIX,” Ng said.
For PineBridge, the fund is co-managed by Hiroyuki Saito and Akihiro Sekiya, with Akihiro also served as the Head of Japanese large cap equity at the firm. “They have been working in PineBridge for over 10 years, which was formerly known as AIG Investments,” he added.
Fees
The latest ongoing charges (OCF) of the JPM fund and the PineBridge fund are 1.69% and 2.34%, respectively. “The OCF for PineBridge is among the highest within the Hong Kong SFC [Securities and Futures Commission] authorised Japanese equity sector. When comparing between the two funds, the AUM of PineBridge is much smaller than that of the JPM fund, and that could be the reason leading to a higher OCF for the PineBridge fund,” he said.
However, the cost of funds of the JPM fund is inline with peers average in the sector.
Conclusion
Ng prefers the JPM fund to the PineBridge product, primarily due to a stronger track record of its fund managers’ performance.
“The fund managers of the JPM product have been delivering strong performance since they have taken over the responsibility of the fund in 2007. The aggressive and timely call for gearing, as well as the bottom-up selection, were the key sources for their outperformance,” he said.
The JPM fund shows its strong commitment to the Japanese market for a long time and provides an edge for investors, he added.
“While the JPM fund seems to be a stronger candidate for Japanese equities investment, investors should also be aware of the fact that the fund is aggressively targeting for a higher level of outperformance, including the use of gearing, despite its recent reduction to around 5%. These could increase the price fluctuation of the fund overall,” he said.
