Advertisement

What to buy, what to sell: Japan and race horses

Why fund tipsters are staying keen on Japan for 2006, and a chance to buy into race horses.

Why fund tipsters are staying keen on Japan for 2006, and a chance to buy into race horses...

Look east for income

Last year was a fine one for both unit trusts and investment trusts. The average fund rose 20%, not bad given that the FTSE 100 rose 16.7%. But the best performers were those that looked east for income.

Advertisement - Article continues below

This, says Andrew Pitts in Money Observer, is a reflection of the coming of age of some of the world's more far-flung markets. Firms in Japan or Singapore are now finally beginning to pay regular dividends, for example; and in total, Asian firms will have paid out a total of $70bn to shareholders in 2005. All this means that fund tipsters are staying keen on Asia, and on Japan in particular, this year.

Take a look at Melchoir Japan Opportunities, says Patrick Collinson in The Guardian. It launched only two years ago, but already has £400m worth of assets under management and was 2005's best-performing fund, beating 1,700 others to top place with a 94.1% gain. A repeat performance quite like that in 2006 is "unlikely", the fund's manager told Collinson, but there is still value, and hence potential, in Japan's small and mid-cap firms.

The second-best performer in 2005 was another Japan fund, Scottish Widows Investment Partnership's Japan Smaller Companies fund, which turned in a 76% gain. It holds many of the same stocks as the Melchoir fund, including Daifuku, which makes factory automation systems for carmakers.

But which is the best Japan fund to buy now? The Odey Japan fund, Justin Modray of Bestinvest told The Times. Japanese firms look in better shape than they have for many years", says Modray, and "we like Odey because it has good exposure" to small and mid caps. 

Buy a race horse

If you've always wanted a race horse, 2006 brings good news. Launching this month is Breeding Capital, which aims to raise £5m and use it to buy and trade high-quality broodmares, foals and yearlings. The fund is to be launched and run by Christopher Holdsworth Hunt, former co-founder and MD of Peel Hunt stockbrokers, and William Sporborg, a private-equity fund manager and former jockey. The minimum investment will be £10,000, and investors will not be able to cash out until 2010. Risky though, so not for widows and orphans. See www.breedingcapital.com.

Advertisement
Advertisement

Recommended

How the fear of death affects our investment processes
Investment strategy

How the fear of death affects our investment processes

Many of our investment decisions are driven by one simple fact: the knowledge that, one day, we will be dead. Here, in an extract from his new book, J…
2 Jan 2020
The good investments of the 2010s – and the bad
Stockmarkets

The good investments of the 2010s – and the bad

John Stepek takes a look back on which investments did well and which did badly in the decade that’s about to come to an end.
26 Dec 2019
ESG investing provides shelter in the storm
Funds

ESG investing provides shelter in the storm

Funds focusing on environmental, social and governance (ESG) issues proved resilient during the market slump.
23 Jun 2020
Asian income stocks: where to find the continent's top money machines
Share tips

Asian income stocks: where to find the continent's top money machines

International dividends shouldn’t only mean companies in the US or Europe – the Far East has plenty of big payouts to offer. Cris Sholto Heaton looks …
22 Jun 2020

Most Popular

Eagle Lightweight GT: the reincarnation of the E-type Jag
Toys and gadgets

Eagle Lightweight GT: the reincarnation of the E-type Jag

Jaguar’s classic E-type sports car has been reinvented for the modern age. The result – the Eagle Lightweight GT – is a thing of beauty.
7 Aug 2020
Platinum: the precious metal that looks set to play catch-up with silver and gold
Silver and other precious metals

Platinum: the precious metal that looks set to play catch-up with silver and gold

Gold and silver continue to soar, but there's still time to get in. And there's another precious metal that looks set to go on a bull run too, says Jo…
7 Aug 2020
The MoneyWeek Podcast: how to age well and profit from the “longevity dividend”
Investment strategy

The MoneyWeek Podcast: how to age well and profit from the “longevity dividend”

Merryn talks to economist and author Andrew J Scott and discusses how we can profit from the "longevity dividend" as we live longer; why we need to re…
6 Aug 2020