We believe our active approach to credit investing allows us to better serve clients, as indiscriminate waves of downgrades following the turbulence that has rattled global financial markets this year presents us with compelling opportunities.
After three consecutive months of strong gains, Asian stocks finally succumbed to profit taking in September triggered by concerns that the global recovery from the COVID-19 pandemic could be running out of steam.
Although the coronavirus outbreak has caused major disruptions and geopolitical risk is on the rise, markets are looking forward to recovery. In what appears to be a rapidly changing world, many things remain the same and indeed, may be changing for the better.
The Covid-19 pandemic has accelerated the adoption of internet-based healthcare services. Growing in importance, penetration and acceptance, telemedicine will revolutionise and augment Asia’s healthcare systems.
Yoshihide Suga, Japan’s new prime minister, is widely expected to retain his predecessor’s fiscal and monetary policies known as “Abenomics”.
Clearly, it remains difficult to predict events in this volatile environment, but in the interest of our clients, we do our best and fortunately this time, we had virtually unanimous agreement on a similar scenario as in June, both politically and economically.
The price bifurcation of ASEAN equities this year caused by the COVID-19 pandemic is creating ample stock-picking opportunities for long-term investors. Read on to find out which markets and sectors in the ASEAN region that we have the highest conviction in.
Asian stocks posted gains for the third consecutive month, boosted by positive COVID-19 vaccine developments around the world, the persistently weak US dollar (USD) and resilient Chinese economic data.
The US Treasury (UST) yield curve steepened in August. Yields initially traded in a tight range but experienced an abrupt rise mid-month, pushed higher by the uptick in the US July inflation readings and the US Treasury's outsized refunding announcement.
Internet companies have gone from strength to strength, dramatically outperforming the broader market year-to-date.
It does not seem that there are enough differences between Abenomics and the proposed economic policies of likely new Prime Minister Suga to justify the completely new portmanteau “Suganomics,” as a few analysts have suggested.
In late August the Nikkei made a full recovery from the "Corona shock" lows touched in March, amid initiatives by the government and the central bank.
Although it is fairly clear that Buffett’s investment is not just a passive one in that he intends to collaborate on business ventures with these trading companies, the fact that the world’s most famous investor has committed to such large sums has ramifications for both domestic and international perceptions about Japanese equities.
Many media reports are suggesting that Yoshihide Suga is leading the race to be Japan’s next prime minister, with a main question being whether he, without a large faction of his own, will just be a temporary placeholder for new leader.
It is attention-grabbing for some analysts and soothsayers to speculate on politics, but this is no casual matter.
Not many investors likely realize that Japan’s GDP performance in CY20, instead of being comparably poor, is actually about equal to that of the US, and well above the Eurozone’s.
Regional markets enjoyed another bout of strong performance in July. Global market sentiment remained buoyant due to optimism about the development of a vaccine for COVID-19; upbeat earnings of big technology companies; and assurance from the US Federal Reserve (Fed) that monetary policies would remain highly accommodative in the foreseeable future.
US Treasury (UST) yields traded in a very tight range, with the yield curve ending flatter in July.
The global economic recovery is continuing, although at a marginally slower pace; this is to be expected considering the impact of the second COVID-19 wave on the US sunbelt.
While everyone’s individual experience of this global pandemic has been different, there are many shared experiences that we hope readers will be familiar with. In short, the adaptations we have made as a society have changed the way we live and work. Might these new behaviours give a clue as to what industries and companies will prosper in the years ahead? Well, yes and (likely) no, but at least the task of observing our recent past may help us make sense of the present while giving us a clue about what might be round the corner.
The Japanese equity market dropped in July, with the TOPIX (w/dividends) declining 4.02% on-month and the Nikkei 225 (w/dividends) falling 2.60%.
Our philosophy is centred on the search for "Future Quality" in a company. Future Quality companies are those that we believe will attain and sustain high returns on investment.
Our philosophy is centred on the search for "Future Quality" in a company. Future Quality companies are those that we believe will attain and sustain high returns on investment. ESG considerations are integral to Future Quality investing as good companies make for good investments.
As China’s fixed income market continues to grow in depth and size, it has helped create interesting trends that are worth following. While some of these trends are not new, we do see finer developments within that could pique investor interest in realising additional alpha.
Modern alpha relies on multiple sources and is therefore more stable and recurring than the traditional “big bets”. For most investors, the main source of alpha is fundamental research. But to add stability it is plausible to combine fundamental research with quantitative strategies as an additional alpha source.
Despite major improvements over the last two decades, some critics will always doubt the progress of economic reform in Japan.
Future Quality: Attain and sustain high returns on investment
Attain and Sustain High Returns on investment
Our strategy is based on the Future Quality philosophy. We expect to find alpha by seeking Future Quality companies with sustainably high or improving returns on investment over the long term.
We identify Future Quality by assessing a business across four key pillars - Quality of Franchise, Management, Balance Sheet and Future Valuation. This framework gives us a complete picture of the potential for investment. We also believe that environmental, social and governance (ESG) considerations are integral to Future Quality - good companies make good investments.
Experience, mutual respect and a shared passion
A team of global equity portfolio managers with a flat structure and based in Edinburgh, Scotland.
Harnessing over 110 years of collective investment experience, the Nikko AM Global Equity team has the depth, balance and diversity of experience that enables them to focus their research and identify the real opportunities for your portfolio.
Portfolio Manager
Academic background:
MBA
Portfolio Manager
Academic background:
History
Portfolio Manager
Academic background:
Geology
Portfolio Manager
Academic background:
Law
Portfolio Manager
Academic background:
MBA
Portfolio Analyst
Academic background:
Economics
Portfolio Analyst
Academic background:
History
We are passionate believers that our team’s collective knowledge is more powerful than any individual team member’s. We harness over 110 years of collective investment experience to strive for outperformance and grow capital for our clients.
Our shared passion for discovering Future Quality businesses drives our disciplined, repeatable investment process, which is why our clients trust us to manage more than USD 4 billion* globally. We believe a team-based approach to investing best limits key person risk and cognitive bias, and delivers the benefits that come with the deep and diverse experience of the team. Our most senior team members constantly share their experience by mentoring our younger colleagues. At every stage of the investment process ideas are challenged through rigorous and open debate and within a culture of mutual respect.
Our core values of diligence, respectfulness, mindfulness and transparency form the foundation of our team culture.
*As of 30 Sep 2023
The wider Edinburgh Global Equity team
“The team’s collective experience and flat structure are crucial elements of our investment process and ensure the successful delivery of Future Quality ideas for client portfolios.”
Creating a high-conviction portfolio
Our process for identifying long-term winners starts with robust idea generation that is validated by bottom-up fundamental research. Our flat team structure means all portfolio ideas are peer challenged, with each portfolio manager sharing both analyst responsibilities and ownership of investment outcomes. Ideas are then ranked using our stock-ranking tool.
This process of actively challenging investment ideas limits cognitive biases that can lead to inferior returns. This comprehensive process generates a portfolio tilt towards growth and quality, with a total carbon footprint well below the MSCI All Countries World Index.