285. Demographics, automation, and AI: Japan’s complex landscape

Sophia Li, manager of FSSA Japan Focus, joins us to discuss the driving forces behind the strong performance of the Japanese stock market in 2023. We delve into the influence of foreign investors - particularly Warren Buffet - on the Japanese market and whether their growing confidence should serve a positive indicator for long-term investors. We discuss the consequences of Japan's aging population on the economy and how the impact of this varies for different companies. Sophia also shares insights on the adoption of cashless payments in Japan, as well as its strengths in robotics, automation, and AI and how they contribute to investment opportunities in the market.
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Launched in 2015, the FSSA Japan Focus fund is a high-conviction portfolio driven by a unique philosophy and process that disregards benchmark constraints. Its success in other Asian markets has now extended to Japanese equities, making it a strong core choice for investors seeking exposure to this region. Backed by an experienced team, the fund focuses on quality and predominantly invests in large and medium-sized Japanese companies.

What’s covered in this episode:

  • What are the drivers behind the strong performance of the Japanese economy
  • What foreign investment into the region means for Japanese companies
  • The influence of Warren Buffet on Japanese equities
  • Is there an increase in dividends in the region?
  • The growing adoption of a cashless system
  • The demographic headwind in Japan
  • Why an aging population is an opportunity
  • The fund’s exposure to automation, robotics and artificial intelligence
  • The stylistic nature of the Japanese market
  • What could make growth and quality come back into favour
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