Andrew Cole, lead manager at Baring Multi Asset fund, has introduced Japanese equities to the £335m ($506m) fund, for the first time since launch, after its exposure to gold and other safe havens has been reduced.
The fund, which was launched in March 2009, has seen its allocation to Japanese equities rise from zero% at the start of 2013 to 4%.
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Cole has been targeting sectors that will benefit from the weaker yen, with a focus on automakers, financials and real estate.
Cole said: "We believe the recent recovery in Japanese equities is sustainable given the authorities’ commitment to manipulating a weaker yen and boosting a flagging domestic economy. The measures taken by the Bank of Japan appear to be more credible than anything we have seen in the past.
"As such, we believe Japanese equities are set to provide good opportunities for investors. There are signs of traction in the Japanese economy as the sentiment of small firms, consumer confidence and industrial production growth has started to improve."
In keeping with seeking opportunities created by weaker currencies, Cole has looked to benefit from the depreciation of sterling by increasing his exposure to UK companies with high overseas earnings.
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By GlobalDataThe fund’s allocation to UK equities has increased from 17.7% in September 2012 to approxiamtely 27%.
Cole has also reduced the fund’s exposure to gold, moving from 6% in July to 3%, and sold out Australian government bonds in anticipation that investors will start to exit perceived safe havens and increase their risk profiles.
