Bottom up research focusing on competitive advantages and corporate reforms.
The investment team believes that significant alpha can be obtained through bottom up research to identify two types of firms:
By applying these two perspectives to stock selection, the investment team believes it can consistently deliver stable excess returns over the market.
Toshinori Kobayashi, the strategy’s lead portfolio manager, possesses broad experience from across a wide range of investment styles. Since becoming a portfolio manager in 1992, he has managed value, growth and small-cap equity investment portfolios across multiple market cycles.
He is supported by Nikko AM’s robust equity research platform. A major competitive advantage of Nikko AM’s is the depth and quality of its proprietary research, which covers companies across a broad range of market capitalisations. In addition to sector analysis, the portfolio managers are supported by style analysts (small/mid cap and value). The different types of analysts bring different perspectives. This combination of perspectives allows Nikko AM to deliver more comprehensive analysis compared to its peers.
Bottom up, Fundamental Research
Focus on Competitive Advantages & Corporate Reforms
Experienced Investment Team & Robust Research Platform
Style agnostic, “Best Ideas” Portfolio
The portfolio is constructed through a combination of highly rated stocks from the research universe and the portfolio manager’s own ideas; historically about 80% of the names have analyst “buy” recommendations. The stock selection process identifies a diverse group of companies with high potential for growth and capital appreciation, emphasizing the following two attributes in the context of mid- to long-term industry trends:
Positional: Dominant market share, network of relationships, brand name, gatekeeper
Capability: Technology, product innovation, marketing, cross-selling
The portfolio comprises two distinct groups of companies which differ in terms of capital efficiency (ROE) and valuation (P/B). Weights are determined according to levels of expected return and the portfolio manager’s conviction.
The strategy’s portfolio is style agnostic. Its style exposure is controlled, allowing for stock selection across the growth/value spectrum. The strategy is thereby able to generate consistent alpha in different market environments, resulting in an “all-weather” portfolio.
Portfolio Manager
Toshinori Kobayashi has served as team leader and portfolio manager of the Research Active Management team since 2010.
He began his career at Nikko Securities Investment Trust & Management (a predecessor of Nikko AM) in 1988 as a research analyst. He became a portfolio manager in 1992 and was subsequently promoted to team leader of the Market-Oriented Portfolio Management Team in 2003. He holds a B.A. in Law from Chuo University and is a Chartered Member of the Security Analysts Association of Japan (CMA).
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