The Japan Growth Equity strategy aims to generate out performance by investing in companies which deliver greater than market average earnings growth, over the medium to long-term.
- Opportunistically invests across all market caps
- Sector weights are a residual of bottom-up stock selection
- 1-year investment time horizon
- Stock selection is the primary source of returns
- Approximately 100 name stock portfolio
The investment team aims to identify companies with higher potential and invests in them whilst such potential is not fully recognised by the market. The basic premise of this strategy is that when Earnings Per Share (EPS) is growing strongly, the stock return will exceed the index return.
The investment team seeks companies with reliable growth drivers, selling at reasonable valuations, which they believe will deliver superior returns on a sustained basis.
The Japan Growth Equity strategy has firm criteria for selecting growth companies.
- Will operating profit reach a historical high over the medium-term?
- Will earnings growth steadily outperform the market average over the medium-term?
- Will earnings growth momentum accelerate in the coming year?
- The portfolio managers perform stock selection with heavy emphasis on these criteria.
The foundation of this approach is based on the research conducted by Nikko AM's sector research analysts, who are assigned a Research Universe comprised of the top 1,000 stocks (by market capitalisation) in the Japanese equity market.