CashNews.co
By Miho Uranaka and Brigid Riley
TOKYO (Reuters) – Mizuho subsidiary Asset Management One aims to raise half a trillion yen ($3.4 billion) for its first Japanese stocks fund investing in big companies, in a bet global investors will stick with Japanese equities even after a market collapse in early August.
The new fund will invest in 50 of Japan’s largest firms and is the first at Asset Management One to focus on large domestic companies, President and CEO Noriyuki Sugihara told Reuters in an interview.
AM-One, which manages over 69 trillion yen ($470 billion) as of end-July, aims to eventually draw 500 billion yen in investor contributions to the fund, he said, without giving a time frame.
The fund manager has also launched a crossover fund that supports not only listed companies but also unlisted ones, from the unlisted stage and after they go public. The moves point to confidence that a sparkling rally in Japanese equities can extend, after recouping most of August’s wipeout, and that global interest will remain.
“Focusing on Japanese stocks means that we are committed to the transformation of the Japanese market,” Sugihara said.
On August 5, Japan’s Nikkei suffered its biggest rout since Black Monday in 1987, dropping 12.4% as a sudden surge in the Japanese yen spooked investors. It has since recouped that fall and on Monday sat at levels where it traded in late July.
Sugihara said the sharp decline was mostly a result of adjustments of holdings by short-term momentum traders and the fundamentals of the market have not changed.
Japanese stocks scaled record highs in July thanks mostly to inflows from foreign investors drawn in by a recovering economy and a corporate governance push to improve shareholder returns.
Sugihara said Japanese equities are still somewhat under-rated, have momentum, and in local currency terms have outperformed U.S. stocks over the last three years.
“Investors are beginning to notice,” he said.
($1 = 146.7400 yen)
(Reporting by Miho Uranaka and Brigid Riley; Editing by Lincoln Feast.)