BNY Mellon has launched two new funds – the BNY Mellon Japan Small Cap Equity Focus Fund and the BNY Mellon Japan All Cap Equity Fund.
Both funds are sub-funds of BNY Mellon Global Funds plc and are managed by the Japan-based equity team, which focuses on fundamental, bottom-up stock selection, spanning all cap and small cap strategies as well as customised strategies for clients.
With the objective to pursue long-term capital growth by investing primarily in shares and similar investments of companies listed or located in Japan, the management team will aim to generate value by consistently selecting the stocks where they have identified longer term growth above market expectations.
BNY Mellon’s Japanese equity investment management team, led by Miyuki Kashima, consists of five investment professionals who identify market inefficiencies and take a position based on a one to three year outlook. A disciplined risk-based approach is implemented to focus returns on specific stock selection, avoiding taking a position solely on broader market movements. This longer term view supports a more selective approach to portfolio construction towards a smaller number of high conviction stocks.
BNY Mellon Japan All Cap Equity Fund will consist of a minimum of 50 stocks with an expected turnover of around 30 per cent to 50 per cent per year. The research universe will consist of 200 to 250 stocks, filtering the Top 50 stocks by market cap, which over approximately 50 per cent of TOPIX.
BNY Mellon Japan Small Cap Equity Focus Fund will hold between 20 and 30 stocks with expected turn-over of around 30 per cent to 60 per cent per year. The research universe will consist of 100 to 150 stocks, filtering stocks with a market cap of less than JPY500bn.
The funds will aim to achieve attractive returns by investing primarily in shares and similar investments of companies listed or located in Japan. The funds may invest in REITS, cash, money market funds and equity index futures for cash management purposes and invest up to 10 per cent of its net assets in recently issued company shares not listed or traded on Recognised Exchanges within a year.
Kashima says: “The recent political and economic turnaround in Japan is widely accepted to be only the beginning of a long-term economic recovery. With an unprecedented political will and support for reform in place, Japan is at a major inflection point. The most attractive aspect of the Japanese market is the prospect for a sustained, longer term recovery. Once deflation ends, we believe the investment opportunities for the Japanese market are attractive on an extended time horizon and we believe Prime Minister Abe is on track to accomplish this.”
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