The team believes that a small number of leading companies deliver superior portfolio returns over the long term, if purchased for ‘good value’. For this buy-and-hold strategy, the team applies key success factors including stringent selection based on financial criteria; deep analysis of a business model’s risks and benefits (including pricing power and financial strength); buying ‘good value’ stocks when valuations are cheap; and patience (holding stocks as long as no valid reason exists to sell). Through this approach, the team believes it is possible to participate in the value creation process of superior business models and deliver attractive returns for investors.
The team uses a disciplined, bottom-up process, which starts with a quantitative screening of the Topix universe. Using four financial filters, around 100 successful businesses are identified. In-depth, fundamental company analysis is conducted, focusing on pricing power and financial strength, to understand the past success of these businesses. If the business model is sustainable, the team applies fair value analysis, using their own estimates. An investment is made when a company’s price offers a minimum of 30% discount versus its calculated fair value. The concentrated portfolio of 20-30 large and mid-cap stocks is diversified across business models and rebalanced annually to equal weights.
GAM Star Japan Leaders is managed by the Japan equity team, led by Ernst Glanzmann. Ernst has built an outstanding track record of strong returns versus the benchmark, during his 25 years of analysing and investing in Japanese equities. The team also comprises portfolio manager Reiko Mito and junior portfolio manager Lukas Knüppel.
The team has in-depth knowledge of the Japanese corporate sector, equity market and economy, based on many years of continuous analysis, supported by company visits and meetings with senior management.
The team is responsible for research, stock selection, trading and risk management. However, an additional risk oversight function is performed independently by GAM’s risk teams.
We believe that a small number of leading firms deliver superior portfolio returns over a longer holding period, if purchased for good valueErnst Glanzmann, Investment Director.
Non-base currency share classes may or may not be hedged to the base currency of the Fund. Changes in exchange rates will have an impact on the value of shares in the Fund which are not denominated in the base currency. Where hedging strategies are employed, they may not be fully effective.
Concentration in a limited number of securities and industry sectors may result in more volatility than investing in broadly diversified Funds.
Investment in companies of a single country may be subject to greater political, social, economic and tax risks and may be more volatile than investments in more broadly diversified funds. Local tax law may change retrospectively and without notice.
Investments in equities (directly or indirectly via derivatives) may be subject to significant fluctuations in value.
All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.