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GLG Japan CoreAlpha a firm favourite

FUND PROFILE: GLG Japan CoreAlpha is a sound choice for getting core Japan exposure into your portfolio.
April 5, 2011

GLG Japan CoreAlpha Fund is a firm favourite among most financial advisers and analysts recommending a core Japan fund. Besides the fund's impressive track record relative to its peers, GLG's focus on larger companies sees it well placed to survive any further wobbles in the Japanese market.

81.75p

Stephen Harker, manager of the GLG Japan CoreAlpha Fund, believes Japan is well placed to perform in the coming years, saying that the corporate sector's huge restructuring programme - triggered by the 'lost decade' in the 1990s, has left it in rude health.

The best illustration of Japan's transformation, according to Mr Harker, can be found in its banking sector. He points out that, of the 19 major banks that existed in Japan in 1989 (the peak of the bull market), just one survives under the same name today. "In other words, Japan is at the bottom of a once-in-a-lifetime credit cycle; by contrast, the western world, led by the US, has just passed the top of a credit cycle. Clearly this implies different levels of economic and investment risk - both of which are stacked in favour of Japan, not the west," he says.

Indeed, the fund's overweight in financial sectors served it well in February, as the sector was among the top performers. The fund rose 4.2 per cent for the month, outperforming the IMA Japan sector. For the month, the fund was ranked 8th of 58 funds, while for the past 12 months, the fund was ranked 20th out of 57.

Long term the fund's performance is even more impressive compared with its sector peers, returning top-quartile performance over three and five years and ranking second in its sector over both time frames.

GLG JAPAN CORE ALPHA FUND ACC NAV (4SJRA)
PRICE81.75p1-YEAR  PERFORMANCE-5.57%
SIZE OF FUND£1,171m3-YEAR PERFORMANCE10.09%
No OF HOLDINGS395-YEAR PERFORMANCE 2.59%
SET UP DATE29 November 1999TOTAL EXPENSE RATIO1.64%
MANAGER START DATE01 January 2006YIELD1.76%
BETA (3-YR) 1.08MINIMUM INVESTMENT£1,000 initial, £50 thereafter
SHARPE RATIO (3-YR)0.5MORE DETAILSglgpartners.com

Source: Morningstar, GLG*

Performance figures as at 4 April 2011.

Top 10 holdings (as at 28 April 2011)

HoldingPercentage (%)
Seven & I Holdings Co LTD6.90
Mitsubishi Tokyo Financial6.40
Nomura Securities Co LTD6.00
Sumitomo Mitsui Financial GR5.10
Inpex Corporation4.70
Nippon Telegraph & Telephone4.60
Panasonic4.50
Takeda Chemical Industries4.30
Mizuho Financial4.10
T&D Holdings4.00

Sector Breakdown

Sector Percentage (%)
Financial Services25.4
Industrial Materials14.21
Business Services12.51
Consumer Goods12.49
Telecommunications12.17
Hardware7.01
Healthcare5.81
Media1.22
Software UK1.75
Energy5.28