T. Bailey has made a significant move into Japan within the T. Bailey Growth Fund and its passive-only equivalent, the T. Bailey Growth Fund LITE.
In the space of a few weeks it has moved from an underweight to overweight position, with a 9.6% exposure against a strategic benchmark of 7.5% as at 10 March 2010.
T. Bailey Head of Marketing and Communications Philippa Gee said: “The land of the rising sun has seen plenty of false dawns but 2010 may actually see Japan’s fortunes turn.
“There are some really strong companies out there that are looking attractively priced. Japan is still loosening monetary policy when all the Western economies are tightening it; the government there is making the right noises about devaluing the Yen. The combination of the two could kick-start an equity revival. Now is a good time to be making a move.”
Within the T. Bailey Growth Fund, T. Bailey has increased its holding in the GLG Japan CoreAlpha Fund to 5.7% (as at 10 Marc 2010). It has bought small cap exposure through the Fidelity Japan Small Companies Fund and the iShares MSCI Japan Small Cap Index Fund.
Within the passive-only T. Bailey Growth Fund LITE it has invested through a combination of the iShares MSCI Japan Small Cap Index Fund and the BlackRock Japan Equity Tracker.
Gee said the multi-manager specialist is currently hedging Yen risk in the portfolio. She said: “A future devaluation of the Yen might help equities but it will also reduce the benefits for the sterling investor so our managers felt it made sense to introduce a Yen hedge to prevent a ‘two steps forward one step’ back situation, if the Yen devalued against Sterling.
“With the prospects for the UK economy looking bleak, many investors are ready to increase their exposure to global markets. That requires much more active management and also specialist expertise around threats like currency volatility – that’s where multi-manager funds can really help.”
Submitted by: Philippa Gee
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