HEAD-TO-HEAD: First State versus Janus Henderson

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Isaac Poole, Oreana Financial Services

Introduction

The performance of the Japan equity market has inevitably been a casualty of the country’s decades-long struggle to stem and reverse the economy’s deflationary slide.

 The Tokyo Stock Exchange’s benchmark Topix index has a 20-year cumulative return of only 46.09% in US dollar terms, according to FE Analytics data. In the meantime the S&P 500 has generated 254% and the broadly composed MSCI AC World index’s has achieved 191.6%.

It’s a far cry from the property-price fueled stock market bubble of the second half of the 1980s, when the (then) benchmark Nikkei 225 index gained about 225% between the start of 1985 and the end of 1989.

As Isaac Poole, chief investment officer at Oreana Financial Services, remarked to FSA, “Japan is now a rather niche market.”

However, although its status among international investors has diminished, it is still home to some of the largest and most profitable companies in the world.

Stock prices have also held up well this year, with the Topix index returning 13.08% year-to-date. Yet, recent government proposals to reduce the pre-notification threshold for foreign investors holdings in so-called strategic industries to 1% from 10% could threaten the market’s renew buoyancy.

 FSA asked Poole, a sometime investor in Japanese equities, to compare two Japan equity products: the First State Japan Equity Fund and the Janus Henderson Horizon Japan Opportunities Fund.

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