A top-performing global equity fund has more than doubled its exposure to Japan this year, making the move just as a strengthening yen boosts the outlook for domestic companies.
Japanese stocks made up 24% of the $3 billion Orbis International Equity fund as of end-April, up from just 10% four months earlier. The fund focuses on non-U.S. stocks and beat 99% of peers so far this year with a 16% return, according to data compiled by Bloomberg. It’s also ahead of 99% of peers over three and five years.
A multiyear slide in the yen made the average investor "very unwilling” to buy shares of domestic Japanese firms, whose profits got crimped by rising import costs, said Bermuda-based manager Graeme Forster. That means those low-margin businesses were priced at depressed valuations in a cheap currency, he said.
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