Pictet Japanese Equity Selection
Pictet Japanese Equity Selection is a high-conviction strategy which invests in large and medium-sized businesses for the long term. The manager uses a combination of market and fundamental company analysis to select Japanese companies that promote good environmental and governance practices and offer favourable growth prospects at a reasonable price. He uses a four-step process that implements both quantitative and qualitative methodologies to aid his research.
Our Opinion
Fund Manager
Expand
Fund Manager
Close
Sam Perry, Lead Manager Sam Perry has been with Pictet Asset Management since 1997 as a Senior Investment Manager in the Regional Equities team, focusing on Japanese equities. With a strong background in both Japanese and Far East markets, as well as global developed and emerging markets, Sam graduated with a first-class degree in Philosophy and Psychology from the University of Oxford, where he also earned a Doctorate in Experimental Cognitive Psychology.
Sam Perry, Lead Manager Sam Perry has been with Pictet Asset Management since 1997 as a Senior Investment Manager in the Regional Equities team, focusing on Japanese equities. With a strong background in both Japanese and Far East markets, as well as global developed and emerging markets, Sam graduated with a first-class degree in Philosophy and Psychology from the University of Oxford, where he also earned a Doctorate in Experimental Cognitive Psychology.
Read More
Risk
Read more
Back
Company Description
Read more
Back
Fund Performance
Close
Risk
Close
Company Description
Close
Investment process
The manager uses a combination of market and fundamental company analysis to select securities he believes offer favourable growth prospects at a reasonable price. The team considers ESG factors to be a core element of the strategy and adopts a tilted approach which seeks to increase the weight of securities with low sustainability risks and/or to decrease the weight of securities with high sustainability risks, subject to good governance practices. Activities that adversely affect society or the environment – such as oil, gambling and tobacco - are also avoided.
The team champions a collaborative approach to investment research which enables it to build positions with greater conviction and clarity. It uses a four-step investment process.
Step one is the narrowing down of the investment universe of around 3,300 companies whose main business is located in Japan. This includes excluding those that contribute to harmful activities and those which do not have sufficient market liquidity (whose shares may prove difficult or slow to trade).
Step two is where idea generation begins using both quantitative and qualitative resources. These include screening tools, the experience and knowledge of the team, Pictet’s regional experts and sell-side research analysts.
Step three is fundamental research which is used to analyse whether the company is trading at a discount to its intrinsic value and if a clear investment thesis exists. The main criteria for reviewing each stock would be a combination of the company's industry environment, quality, and sustainability of franchise, ESG analysis, financial analysis, and valuation - where the team needs to be convinced that there is at least 20% upside to fair value to start a new position.
Company meetings are also key to this research process. Roughly 400 one-to-one meetings are conducted each year to confirm the team’s investment cases.
Finally, step four is where the portfolio construction occurs. This involves using the research to pick around 40 positions in the large and mid-cap space that provide suitable diversification amongst sectors.
Risk
The team has a “three lines of defence” approach to risk management. The first line is a dedicated investment risk team that reviews the portfolio with risk tools on a day-to-day basis to understand what aggregate risks the portfolio is exposed to. The second is performing an independent oversight of investment risks and ensuring regulatory compliance for investment risk-related matters. The third line of defence is external and internal audits that provide an independent challenge to the levels of assurance provided by business operations and oversight functions.
ESG
ESG - Integrated
The team’s commitment to responsible investment is driven by five main pillars that help it ensure sustainability in the strategy. The first is ESG integration into investment processes and risk management. When making investment decisions and carrying out research, environmental, social and governance factors are firmly included in the evaluation. Secondly, the fund will only invest in responsible products and solutions which help to make a positive impact on society. Thirdly the team maintains active ownership where it engages with issuers if they fall short of expectations. Fourth, the team provides reports on ESG characteristics of client portfolios. Finally, the team uses research and leadership that helps it play an active role in supporting organisations that promote responsible and sustainable investment practices. There is a dedicated ESG team that leads and coordinates the implementation of the responsible investment policy into the investment process, ownership practices and risk management and reporting tools.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.