Self-deprecating fund managers are few and far between, but I discovered one last week – James Salter of Zennor Asset Management. What a pleasant surprise he turned out to be as he talked candidly about investing – rather than puff up the funds that he runs for investors.
James, a founding partner of investment house Polar Capital in 2001, set up Zennor three years ago. It is a business focused purely on extracting returns from the Japanese stock market.
Japan is a part of the investment universe that James and co-investment manager David Mitchinson know intimately. Between them, they ran Japanese portfolios over many years for numerous blue-chip investment brands including JP Morgan and Schroders.
The pair now run two funds, Zennor Japan and Zennor Japan Income. Although the second fund is less than a year old and has assets of £44 million, Zennor Japan has been around since 2021 and has grown to £440 million.
The Japanese stock market has performed well over the past year with the average Japanese investment fund registering a return just short of 10 per cent – figures dampened by a strong pound against the yen. Zennor Japan has made respectable gains of 14 per cent.
Hidden gems: Zennor’s James Salter says the yen will strengthen as Japan raises its interest rates
James, a long-distance open water swimmer who has swum across the Channel, is uncomfortable marketing his own investment wares. He would rather stick with managing money – and then leave it to others to decide whether he and David are worth backing.
He is also frank about the state of the Japanese stock market. Unlike other investment experts, James urges caution. His view is that a lot of the foreign money that has gone into Japanese equities is ‘badly directed’.
He describes it as classic ‘buy high, sell low’ investment behaviour.
James argues that the market is not immune from global shocks. ‘If the United States economy goes into recession, all bets are off,’ he says. ‘It would impact adversely on a lot of bellwether stocks such as Japanese tech companies, which have gone up in price on a wing and a prayer.’
In economic terms, he describes Japan as the barnacle that sits on the whale that is the United States. If the whale gets into trouble, the barnacle will suffer too. He also believes that Japan would not escape fallout from an escalation in the geopolitical tensions between China and Taiwan.
All rather matter of fact – and refreshingly so.
On the positive side, he says the yen will strengthen as Japan raises interest rates, enhancing market returns for UK investors. And as Joe Bauernfreund, of Active Value Investors, articulates in this week’s Fund Focus, there are plenty of gems hidden among the Japanese plc universe that are screaming out to be discovered.
‘Japan is not a get-rich quick investment story,’ he concludes. ‘It’s a slow burn.’
In other words, commit money to the sector in stages and invest for the long-term.
Website Trustnet is a good source of information on funds investing in Japan. Zennor Japan can be bought through the AJ Bell investment platform, while its sister Income fund is available via Hargreaves Lansdown.
Fixed-rate bond scammers are back – and they are slicker than ever
Last spring, retired businessman Ron Newman (and thousands of other people besides) was under siege from online scammers.
Every time he switched on the computer at his home in Shepperton, Surrey, there was another email pressuring him to invest in an attractive fixed-rate bond, apparently backed by one of the country’s leading brands: be it Centrica, EDF Energy, Heathrow or M&S.
Thankfully, as we reported in these pages at the time, 86-year-old Ron was never fooled by these fraudulent offers. He gave them short shrift, while helping us ensure the companies whose brands had been cloned did all in their power to close the fraudsters’ websites.
Sadly, the scammers are back. Last month, Ron received an email purporting to be from Primark about an ‘exclusive’ investment opportunity that he could not afford to miss. It said the retailer – a ‘trailblazer in affordable fashion’ – had joined forces with ‘financial titan’ Morgan Stanley to offer a bond paying 7.25 per cent. ‘A fusion of style and finance,’ the email trilled.
Ron admits that the use of two premium brands in one email made him wonder whether this time around the bond offer was genuine. So, just in case, he forwarded the email to me to check it out.
Clicking on the link to register for the bond, it soon became apparent that it was a scam.
The page it takes you to was scant on key details – other than the need for a minimum investment of $10,000 (£8,000) – and heavy on further links (four of them) enabling you to make your investment straightaway. It urges: ‘Act fast as limited bonds are available.’
Though Morgan Stanley staff wouldn’t comment on the offending email when I sent it to them, the investment bank did confirm it was a scam. So, if you receive this email in the coming days – or have done already – please disregard it.
Even better, report it to: fca.org.uk/consumers/report-scam and then drop me a line at: jeff. firstname.lastname@example.org.
This mutual is thriving… 100 years on
Think building society, think Nationwide. But there are plenty of other societies – 41 in fact – which, like Nationwide, do a splendid job for savers and borrowers, keeping branches open and supporting communities.
Among them is Vernon, based in Stockport, Greater Manchester. Next month, this mutual will celebrate its 100th birthday with a smile. Why? Because it’s thriving.
Its savings and mortgage books are in growth mode and its six branches have never been busier. There are even whispers of new branch openings. Never!
To mark its centenary, Vernon has set up a charitable foundation that will distribute in dribs and drabs £100,000 of funds to support businesses and charitable work in Greater Manchester and Cheshire. How brilliant.
In a world where big financial brands dominate – yet often disappoint with atrocious customer service – we should cherish the Vernons of this world which stand four-square behind the communities they serve.
‘Dogflation’ a problem for households
Owning a dog, especially a pedigree, is becoming unaffordable for many households as a mix of rising food bills, mind-blowing vets’ costs and soaring insurance premiums take its toll on their finances.
According to dog rehoming charity Dogs Trust, ‘dogflation’ is running at 9 per cent – twice the rate of inflation in the wider economy – and is forcing some owners to give up their pets.
Last year, the charity received 45,000 requests from owners looking to hand in their pets, and the problem, it says, will not go away without Government intervention (for example, a VAT moratorium on pet food and vets’ bills).
Insurers, of course, are having a field day, charging owners of some dog breeds annual premiums of £1,500 plus – while hitting them with a mix of excesses and copay fees (a fixed percentage of the vet’s bill) when they make a claim. Scandalous.
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