Unique business models “Only in Japan”

Although Japan is perceived as a low-growth economy, there are plenty of attractive companies, says FSSA Investment Managers.

Despite the perception that there is little or no growth in Japan, the core portfolio holdings in the FSSA Japan Equity Fund have been able to adapt and grow despite economic headwinds, and have delivered sustainable earnings growth and attractive shareholder returns.

Tourists who have visited Japan would most likely agree that it is a country like no other. Those who have yet to be introduced to this unique country may find aspects of its inimitable culture and customs unfamiliar, perhaps even inscrutable. From an investment perspective, this same unfamiliarity with the Japan market – with dissimilar investment opportunities compared to other equity markets – could present investors with considerable challenges.

At FSSA Investment Managers we believe that a deep knowledge of the local market and an understanding of the cultural and societal aspects of Japan are critical in the research and analysis of Japanese companies – especially if there are no direct Western parallels to draw a comparison. As a team, we spend most of our time visiting companies and carrying out research trips to the countries where we have made investments (though we have temporarily moved to “virtual meetings” due to Covid-19).

We have found that the Japan market contains businesses that are uniquely Japanese. For example, M3 is a global leader in online medical-related services.

We explore some of the other myths and misconceptions of investing in Japan on our website: firstsentierinvestors.com.

Important information This document is not a financial promotion and has been prepared for general information purposes only and the views expressed are those of the writer and may change over time. Unless otherwise stated, the source of information contained in this document is First Sentier Investors and is believed to be reliable and accurate.

References to “we” or “us” are references to First Sentier Investors. First Sentier Investors recommends that investors seek independent financial and professional advice prior to making investment decisions.

In the United Kingdom, this document is issued by First Sentier Investors (UK) Funds Limited which is authorised and regulated in the UK by the Financial Conduct Authority (registration number 143359). Registered office: Finsbury Circus House, 15 Finsbury Circus, London, EC2M 7EB, number 2294743. In the EEA, issued by First Sentier Investors (Ireland) Limited which is authorised and regulated in Ireland by the Central Bank of Ireland (registered number C182306) in connection with the activity of receiving and transmitting orders. Registered office: 70 Sir John Rogerson’s Quay, Dublin 2, Ireland number 629188. Outside the UK and EEA, issued by First Sentier Investors International IM Limited which is authorised and regulated in the UK by the Financial Conduct Authority (registration number 122512). Registered office 23 St. Andrew Square, Edinburgh, EH2 1BB number SC079063.