Japan Growth fund to redenominate allowing shares to be included in FTSE All Share
The £134m Atlantis Japan Growth fund is to redenominate its shares into sterling from US dollars in a bid to make the trust more attractive to UK investors.
The change in denomination will allow the shares to be included on FTSE All Share Index. In addition, each ordinary share will be divided into 10 units.
Atlantis says: “The board of the Atlantis Japan Growth fund believes the admission of the shares to indices such as the FTSE All Share Index will further improve the marketability of the shares, as well as increase demand from products such as index trackers.”
The board hopes increased investor interest will have a positive effect on its share price, which is currently trading at around a 17% discount to NAV.
Investment manager Ed Merner believes Japan’s improving economic outlook and stock undervaluation means now is good time to invest in the country.
“The Japanese economy continues to show improvement and, at present, exports remain the major driver. In addition, month-on-month housing starts are improving, industrial production is now up year on year and even consumer spending seems to be showing some signs of improvement,” he says.
“We think investors have been side-tracked from the big picture, which includes steadily improving economic indicators and the improving outlook for corporate earnings.
“Japanese stocks are now, especially on a selective basis, very undervalued and if one can take a long-term view and maintain a ‘buy on weakness’ approach, this seems a very good time to be increasing one’s exposure to Japan.”
The fund does not carry any foreign currency hedges and Merner says the trust’s NAV got a boost from the stronger yen in January.
Since its inception in May 1996, the trust has returned 23.4% to 29 January, compared to the Topix return of -38.2%.
