Alpha opportunities in Japan

Japan is typically perceived as a low-growth economy with a rapidly ageing population. However, according to Eastspring Investments, investors willing to look beyond the economic headlines will discover a market of stocks that is attractive on many fronts.

“We think that Japanese corporates have shown significant earnings resilience in recent years – with Topix EPS outperforming S&P and MSCI Europe EPS over 10 years,” writes Portfolio Manager Ivailo Dikov in a recent insight. “This is no small feat given the scale of financial engineering going on in US corporates! Examples of proactive policy that have boosted earnings include restructurings, where excess capacity has been taken out in steel and autos companies, and a focus on pricing, for example in beer and beverages.”

In the insight, Dikov further explains why investors remaining sceptical on Japan may risk missing out.

Read the full insight at www.eastspring.com.