The top five asset classes to target in 2017
By Kristen McGachey, 22 Dec 16
As 2016 draws to a close, these are some of the key areas investors are pinning their hopes for the new year on.
Avoided by many during 2016, the unloved Japanese market is fast becoming one of the top areas investors are most encouraged by as they look to the year ahead. After the US, Japan was selected by 20% of participants in the AIC’s annual fund survey to outperform in 2017.
US tax reform and deregulation likely to pass under a Republican controlled Congress could provide an unintended boost to Japan by weakening its currency further, argues Neptune CEO and fund manager Robin Geffen.
“Rising yields around the world have acted to deliver a much-needed depreciation of the yen, given the BOJ’s policy to peg 10-year yields on Japanese government bonds at about zero,” he said. “We believe that there is a lot to like about Japanese equities given domestic policy support and corporate reforms. Global macro, which spoilt the picture earlier in the year, has now turned supportive.”
Also promising, is the improving corporate governance picture in Japan, said Heartwood’s Stanes.
“Our reasons for investing, though, are less beholden to policy expectations, but focused on the micro story, where corporate governance developments are driving efforts to improve shareholder value. We also believe there are interesting opportunities to be found in the ‘New Japan’, which includes domestically-focused sectors positioned to benefit from ageing demographics (healthcare and consumer discretionary) and digital advancements.”
Tags: Investment Management
