HEAD-TO-HEAD: Pictet versus T Rowe Price

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Introduction

Japanese stocks climbed to a 30-year high after prime minister Yoshihide Suga’s plan to resign encouraged optimism that his successor would increase stimulus spending and perform better at handling the coronavirus pandemic.

Japan’s equity market had rallied in the first few months of Suga’s premiership, and the Nikkei 225 rebounded to 30,000 for the first time in 31 years earlier in February. Stocks were largely rangebound in the following months, before record earnings expectations and rising vaccination rates prompted a further surge.

In the summer, Suga suffered a series of setbacks, including a loss by one of his allies in an election for mayor of Yokohama. His subsequent resignation has led investors to hope that his replacement, former foreign minister Fumio Kishida (who took office on 4 October), will spend more to battle the virus.

Nevertheless, many investors saw the market’s strong rally as an opportunity to take profits. In September, Japan equity funds had net outflows of JPY120bn ($1.05bn), which were the second largest monthly withdrawals this year.

Against this background, FSA asked Darius McDermott, managing director, Chelsea Financial Services, to select two Japanese equities products for comparison: the Pictet Japanese Equity Opportunities Fund and T Rowe Price Japanese Equity Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 15 October 2021)

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