Lazard carves new path to burgeoning Japanese stocks

Patrick Buncsi

13 September 2024

Lazard Asset Management has launched a new fund for Australian investors targeted at undervalued opportunities in Japan’s equities market.

The Japanese Strategic Equity Fund, Lazard said, focuses on “bottom-up stock selection in a style-neutral absolute-return manner”. The fund holds around 30 securities.

Target long-term returns (ex-fees and taxes) for the fund are 3% to 5% per annum over the Tokyo Stock Price Index (TOPIX) benchmark. Year-to-date returns on the TOPIX are up 8.42%, as at 12 September.

The fund will be managed by the Tokyo-based Lazard Japanese Equity team, who has overseen the fund’s overarching strategy since 2006, and led by portfolio manager and analyst June-Yon Kim.

According to Kim, the Japanese equity market offers numerous opportunities for Australian investors, with “a broad and diversified investment universe” that is “lowly correlated to other developed markets”.

Investors will be able to capitalise on two ongoing themes in Japan’s equities market, Kim said: “corporate governance improvement driving better capital efficiency and higher shareholder return, and the shift from deflation to inflation gradually transforming economic behaviour”.

“We believe the market is still underestimating the potential of these two secular tailwinds. Now is an opportune time for investors to revisit their strategic weighting to Japanese equities.”

Citing data from eVestment Japan, Lazard boasts that its Japanese Strategic Equity strategy is among the peer group leaders (ranked in the first percentile) for performance over the last five years.