3 Top Rated Funds to Pick Up Cheap Japanese Stocks

Japanese stocks are undervalued compared to their global counterparts. Morningstar analysts outline their three favourite funds in the region

Peter Brunt 15 December, 2017 | 8:01AM

Japanese equities should pique investors’ interests due to their historical and global low valuations. On a price to book basis, the Topix index is trading at a discount to the S&P 500, MSCI Europe and MSCI Emerging Markets indices.

With Prime Minister Shinzo Abe and his government continuing to strive to counter the longstanding fears of consistent deflation, limited growth and poor corporate governance, it can be argued that Japanese equities are starting to appear attractive on a fundamental basis too.

Evidence is growing that Abe’s policies are taking effect – the labour market is at its tightest in over 20 years, nominal GDP and corporate profits are at record highs, the level of share buybacks and dividends by Japanese companies has grown significantly, as has the appointment of independent directors on company boards, better representing shareholder interests.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Lindsell Train Japanese Eq B Yen Acc234.41 JPY1.13
Man GLG Japan CoreAlpha Retail Acc A135.02 GBP1.21
Schroder Tokyo A Acc £3.53 GBP-0.39

About Author

Peter Brunt  is a Senior Fund Analyst for Morningstar UK

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