Germany – 44 medals in 2012
You have to go all the way back to 1952 to find a Summer Olympics without a German top 10 placing. Chris Hiorns, manager of the EdenTree Amity European Fund, says corporate Germany shares similar traits to the perennial Olympic powerhouse, housing many of the world’s highest quality and resilient companies.
“The German stock market offers access to a plethora of high quality engineering names, from large global multinationals to more specialist small and medium size ‘Mittelstand’ companies – which are often credited with turning Germany into an economic powerhouse. Indus Holdings is a company specialising in providing a responsible long-term home for Mittelstand companies from a broad range of different industries – including construction, automotive, engineering and medical.
“It has a 30-year track record of managing these companies on a sustainable basis, with healthy balance sheets and attractive operating margins. Indus’ reputation as a trusted home enables it to purchase businesses at attractive valuations from founding families looking to safeguard the long-term future of their companies.”
Japan – 38 medals in 2012
While the world’s attention after the Games will soon switch to Japan in anticipation of the 2020 Olympics, Brad Tank, the chief investment officer – fixed Income at Neuberger Berman, says global investors have already made moves into the Land of the Rising Sun, particularly after the Brexit vote.
“The sharp rise in the Japanese yen is one of the more challenging effects of the referendum vote. The yen has long been viewed as safe-haven currency, and thus recently reached highs not seen since 2014, threatening to undermine progress made via Abenomics. Given the bleak picture, we think it is possible that Japan could be the first country to introduce ‘helicopter money’.”
Australia – 35 medals in 2012
Australia’s Olympic team has historically been reliant on its powerful swimming team, not dissimilar to the country’s dependence on its mining sector. Jeremy Lang, founder and partner at Ardevora Asset Management, discusses the resources paradox.
“While we have recently witnessed some value opportunities opening up in the resources sector, we remain bearish on the likes of Anglo-Australian giants Rio Tinto and BHP. Rio Tinto looks like a value trap. Management still appears to be in denial, believing current difficulties are transient and little needs to change from its side. But most investors view it with relative calm, because of its less aggressive pursuit of growth in the past. The riskier looking resources businesses are the safest to own at the moment – with a willingness to sell risk – whereas the safer ones are still in denial and are willing buyers of risk. This reshuffling of risk will not solve the entire industry’s problems.”
