Out of the total 3,800 listed companies in Japan, there are approximately 3,500 mid/small-cap companies whose market cap is less than 200 billion yen (appx. $2b)). Those mid/small-cap companies are scarcely followed by sell-side analyst, resulting in frequent miss-pricing. The Fund pursues excess returns through in-depth research on growth potential and business risks inherent to mid/small-cap companies.
The portfolio is constructed through stock selection based on the bottom-up approach, by visiting more than 800 companies annually, as well as asset allocation based on the top-down approach, by which the positioning of each stock is identified.
It is essential not to be afraid of taking necessary risks. The Fund will not fly to cash even when stock markets are falling. In case of down markets, the Fund intends to stay invested by shorting stocks and dynamically shifting exposure.
In the midst of globalization, it is imperative to incorporate analysis of Korean and Taiwanese companies especially in the technology sector. Global money flow is increasingly focused on pan-Asian stocks, and the Fund pursues additional source of returns through investing in Asian companies as alternative to Japanese equity.
