M&G Japan Smaller Companies Fund Sterling I Acc
Rated Fund 2016-2018. Seeks out-of-favour companies
This fund scooped the Best Japan Fund title in the Money Observer 2017 awards. Launched in 1984, it has officially been managed by Johan Du Preez since 2015.
The investment approach that he follows tends to be contrarian in nature. Du Preez is looking for companies whose share price he believes does not reflect their sustainable earnings over the long term.
Du Preez thinks stocks can often be mispriced because they are out of fashion, even if the company has strong fundamentals such as a healthy balance sheet and sustainable earnings. He says behaviour biases such as fear or greed often stop investors from making rational judgments. His process frequently leads him to out-of-favour companies.
The manager says he uses disciplined analysis of the fundamentals of a stock to make sure he has a high conviction in the companies he backs -- at the end of 2017 there were just 38 stocks in the portfolio.
With a strong smaller companies focus, Du Preez has at least 80 per cent of the fund in the businesses that make up the bottom third of all publicly listed companies in Japan by market capitalisation.
He believes the changes occurring in Japan today are not cyclical but structural, and offer sustainable returns over the long term for investors who are not afraid to sail into the headwinds.
He says cost reduction, more competitive exporters, improved corporate governance and profitability have resulted in fertile ground for stockpickers like him.
Narrative and ratings content all as of 01 January 2018.See all Money Observer rated funds
|Topix Indx Futr Dec18||5.17 %|
|Mazda Motor Corp||3.91 %|
|Credit Saison Co Ltd||3.75 %|
|Oki Electric Industry Co Ltd||3.73 %|
|NTT Urban Development Corp||3.67 %|
|DOWA Holdings Co Ltd||3.63 %|
|DIC Corp||3.42 %|
|Sumitomo Riko Co Ltd||3.32 %|
|Miraca Holdings Inc||3.30 %|
|Mitsui E&S Holdings Co Ltd||3.30 %|
|Consumer Cyclical||30.26 %|
|Basic materials||15.32 %|
|Real Estate||10.27 %|
|Financial Services||6.62 %|
Johan Du Preez
Johan du Preez has managed the M&G Japan Fund and the M&G Japan Smaller Companies Fund since joining the M&G Equity team in 2015. He began his investment career in 1998 as an analyst with Prudential Portfolio Managers, South Africa (PPMSA). In the following year, he became a senior portfolio manager and shortly afterwards, a director of PPMSA. In 2004 Johan transferred to Prudential’s asset management business in Asia, where he specialised in Japanese equity as an investment director. He graduated from the University of the Witwatersrand with a B Econ Sc in mathematical statistics and actuarial science in 1992 and from the University of Cape Town with a M Com in economics in 2003. He is a CFA charterholder.
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