Michael Lindsell: What we're expecting from Japanese equities this year

Holdings will need to "plough through their own furrow"

 Michael Lindsell, manager of the Lindsell Train Japanese Equity fund

Michael Lindsell, manager of the Lindsell Train Japanese Equity fund

Now that we are just a couple of days into the New Year, it is interesting to reflect on Japanese markets in 2018.

The Japanese market peaked in mid-January and, one way or another, has been declining ever since. Now it is 21% below its peak in January. Looking at what has driven it down suggests investors anticipate cyclical earnings will be hit. The ten worst-performing sectors, all down between 31% and 43% from the 19 January to 21 December, include shipping, machinery, commodity cyclicals and electronics; all sectors that typically feature at the forefront of any earnings recession. Joining them also were banks and securities companies. Why investors need to look through Japan's macro deterrents ...

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