Sumitomo Mitsui Trust Asset Management (Sumi Trust) has launched a Japan equity fund that aims to outperform its index by 4% annually.
The Japan Growth Opportunity fund that will hold 50-80 Japanese companies with high growth potential, the firm said.
Referencing the Topix index, the fund is managed by Hiroyasu Sato (pictured) and will focus on the beneficiaries of long-term trends in the economy, such as Japan’s aging population, combined with a “catalyst strategy”, which is to buy companies that generate momentum through M&A or restructuring.
Sumi Trust says top holdings in the fund include Kikkoman Corporation, a Japanese food manufacturer, Shoei, a manufacturer of motorcycle and motorsport helmets, and Nihon M&A Center, a company providing strategic M&A advice and support services to small and medium-sized business.
Japan has over 3,000 stocks and the fund is currently overweight in industrials and information technology services and is underweight in financial services companies.
Sato said Covid-19 has accelerated existing trends in the Japanese market and created new opportunities.
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