Japan’s best-performing equity fund is betting on the nation’s nonferrous metals and specialty chemicals industries to help it deliver further gains.
The two sectors are attractive due to their low valuations and the fact they will benefit from increased global demand, according to Ben Williams, assistant portfolio manager at Arcus Japan Fund, which has returned about 18% this year. Businesses in those areas will also gain as a weak yen boosts sales, and high cash levels lead to rising dividends and share buybacks, he said.
"Nonferrous metal stocks are trading close to their historical valuation lows,” London-based Williams said in an interview. "Looking longer term, the outlook of metals like nickel and copper are particularly good given rising global demand in areas like green energy transition.”