Capital at risk. All investments involve risk and investors may not get back the amount originally invested.

Investment Approach

Our Japan Equity High Conviction product aims to provide stable excess returns by investing in stocks that we believe will achieve better earnings than market expectation and as a result where we seek to consistently investing in the appropriate stocks for the market environment in a timely manner, ahead of the economic cycle.

A major competitive advantage of the Japan Equity High Conviction investment process is its flexibility to invest in any type of stocks, style biases are a product of our stock selection process. This flexible approach is a fundamental component of the strategy and one of the major differentiating factors in terms of our competition. The bottom-up approach to stock selection, with no restrictions on the proportion of growth or value stocks held in the portfolio, allows for an embedded flexibility for agile portfolio rebalancing to respond quickly and effectively to market conditions within a robust risk framework.

We believe that the application of this approach into a high conviction stock portfolio, of approximately 30 stocks, allows a deeper level of understanding, including ESG factors and stock specific micro leading indicators, of the stocks held within in our portfolio. We are confident in our ability to generate alpha without taking undue risk using this approach.

 

Key Strengths

Local Expertise:
The ability to deal with the idiosyncrasies of the Japan market allows the portfolio managers to effectively pick attractive stocks.

Style Agnostic:
Freedom to generate alpha in all market conditions and not be style led. This enables us to align with the incoming economic/market phase.

High Conviction:
Allows a deeper level of understanding, including ESG factors and stock specific micro leading indicators, of the stocks held within the portfolio.

 

Investment Philosophy

Based on observations in the market, in the Japanese equity space, we believe:

(1) There is no factor investing technique that is always effective in terms of alpha generation. This means a portfolio betting on particular factor(s) does not always generate sufficient alpha.

(2) In order to achieve continuous alpha generation, portfolio managers must consistently invest in the appropriate stocks in a timely manner, ahead of the economic cycle.

All companies have one or more reliable Micro Leading Indicators that enable investors to project their near-term earnings.

• Changes in the indicators are shown before the macroeconomic cycle enters the next phase.

• Furthermore, micro leading indicators improve/deteriorate at different timings by industry and company.

Within our process, we define Micro Leading Indicators as both quantitative / qualitative data directly linked to company earnings which we can utilize to suggest future earnings momentum.

By understanding what drives these Micro Leading Indicators and projecting how they are likely to change through rigorous research and supply chain analysis, portfolio managers can construct a portfolio that agilely adapts to different economic and market cycles.

 

Explore the related fund

No performance information is available as the fund is newly launched.

Strategy Inception Date
February 2020
Lead Manager
Hideyuki TANIUCHI
Style
Agnostic
Reference Benchmark
TOPIX
Performance Target
Benchmark TOPIX with dividends +5%
Pooled Strategy
Yes
Segregated Strategy
Yes
Holding Range
Maximum: up to 30 stocks
Tracking Error Range
Not Set
GIPS® Compliance
No
Taniuchi 2.0

Hideyuki TANIUCHI

Lead Fund Manager

With an investment career of 27 years, Hideyuki Taniuchi started his financial career with Yamaichi Securities in 1996. 


He moved to Nikko Asset Management the following year as a trader to handle transactions in equities, convertible bonds and foreign exchange. In 1999, he started his career as a fund manager being heavily involved in and emphasizing bottom-up research for Japanese equities specializing in growth stocks. 


He joined Daiwa SB Investments (one of the SMDAM’s former entities) in June 2008 to manage the Fundamental Active Strategy, ect. and was promoted to the Unit Leader in 2020. 
Taniuchi is not only a Certified Member Analyst of the Security Analysts Association of Japan, but also obtained the right to use the CFA designation in 2005.


Taniuchi graduated from Tokyo University of Science in 1996, with a Bachelor of Engineering in Industrial Administration.

______________________________

Source: SMDAM as at 1 July 2024
CFA: Chartered Financial Analyst
CMA: Certified Member Analyst of The Securities Analyst Association of Japan         
Daiwa SB Investments Ltd. (DSBI) merged with Sumitomo Mitsui Asset Management Company, Limited (SMAM) on 1 April 2019

Industry Experience 27+ years

Time in SMDAM 16+ years

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Brown Brothers Harriman (Luxembourg) S.C.A.
80, route d’Esch, L-1470 Luxembourg
T: +352 474 066 226
F: +352 474 066 401
E: Lux.BBH.Transfer.Agent@BBH.com

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Alex BARRY

Executive Director, Head of Distribution - UK and Ireland

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Chloé CHOQUIN

Director, Business Development & Client Relations

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Thomas Cartwright

Director, Business Development & Client Relations