Stock pickers find opportunities in Japan

Japanese-yenStock pickers are far more bullish on Japan than top-down managers, says Standard & Poor's Fund Services in its latest review of the sector.

While its analysts found a number of consensus themes across global equity funds, only in Japan views differed sharply.

“Around one-third of the funds considered in our review had overweight positions to Japan, mostly the result of bottom-up stock picking,” said Susan Sworn, lead analyst.

“The debate centered not only around Japan's longer-term fundamental outlook but whether it was attractive enough as a market at prevailing and for many, historically cheap valuations.”

Fund managers surveyed by S&P also questioned what might prove to be the catalyst for longer-term stock market recognition of that value.

In addition, the analysts note an increase in risk aversion among global fund managers as 2010 progressed.

S&P reviewed 106 funds in the global equities sector between June 2010 and May 2011.

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