Geneva-based Union Bancaire Privée (UBP) has launched a fund offering exposure to the Japanese stockmarket with a focus on individual companies’ corporate governance.
For businesses to make the portfolio, they will have to meet certain criteria regarding board structure, shareholder alignment, and oversight by independent directors.
UBP said research into the Japanese stockmarket had found a correlation between share performance and the quality of governance. This ethos forms the basis of the fund’s investment philosophy.
Portfolio managers, led by Zuhair Khan, aim to identify and hold long positions in well-governed companies, whilst going short on the badly run firms making up the country’s 500 largest stocks.
According to the Swiss private bank, government reforms designed to reinforce governance at Japanese companies has created opportunities for those which best adapt to regulatory developments, but not for those which don’t.
Lead portfolio manager Khan said: “Governance is key, and ESG investing is growing in importance among all types of investors across the globe.”
He added that firms with good or improving governance are more likely to perform better on the social and environmental sides as well.
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