Man GLG Japan CoreAlpha Fund

3 minute read

It’s human nature to copy or imitate others. Imitating is a trait we are born with, and children learn by copying. But when it comes to investing, copying others and ‘following the herd’ is not always the best policy. There are some managers that take this to the extreme opposite, by investing in good quality companies that are simply ‘unloved’ and out of favour – the sort of companies nobody else is investing in (yet).

Who's it for? All investors

Look up the word ‘contrarian’ in the dictionary and it will be defined as ‘opposing or rejecting popular opinion’. When it comes to investing, the term ‘contrarian investing’ describes an approach to buying shares in companies when everybody else is selling, and selling shares when everybody else is buying. The idea is to buy into areas of the market that are simply ‘unloved’ in the belief that they will return to favour and the share price will rebound.

Does contrarian investing work?

Contrarian investing can be profitable, if you are able to successfully invest in the shares of companies before they come back into favour. But it can also be an extremely nervous method of investing, because those companies can remain out of favour for a long time. While most experts typically recommend that you should have a time horizon of at least five years for investing in shares, investors following a contrarian approach may well need to buckle up for far longer.

Don’t all investors do this?

No, certainly not. It is human behaviour to ‘follow the herd’, which can lead one to investing just in the shares of companies that have recently performed well. Emotions play a huge part in our investment decisions, such that it can be extremely difficult to take the decision to buy shares in companies that nobody else is buying and to avoid the most popular shares.

In fact, there are not many funds to choose from, which follow a contrarian approach. But we are going to focus our attention on the Man GLG Japan CoreAlpha Fund, which has a long and successful track record in identifying good quality companies that are simply out of favour. Note that past performance is not a reliable guide to future performance.

Man GLG Japan CoreAlpha Fund

The fund is managed by Jeffrey Atherton and Adrian Edwards, two experienced contrarian investors who between them have been investing in Japan for over 45 years. The duo is backed up and supported by a strong team of investment analysts at Man GLG.

The two managers believe that it is possible to deliver superior investment returns by investing in a portfolio of carefully identified companies that are simply out of favour. But the most difficult part of the process is to hold these companies patiently for a very long period of time. The team at Man GLG have managed to perfect this process.

A fund of long-term ideas

It can take a while for some of the companies they invest in to become success stories. A few years of waiting patiently. And that’s what contrarian investing is all about. The Man GLG Japan CoreAlpha Fund aims to identify these high quality businesses that are simply misunderstood and unloved by the market. And wait patiently.

And while no one knows where markets are heading from here, this could be a fund worth considering if you are thinking of investing in something ‘contrarian’. The Man GLG Japan CoreAlpha Fund is part of the Barclays Funds List – one of the actively managed funds that have built solid reputations and established sound investment processes, selected by Barclays’ investment specialists. Find out more information on these funds.

Correct at the time of publishing.

To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These Barclays multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

Past performance of the fund and its manager are not a reliable indicator of their future performance.

We don’t offer personal investment advice so if you’re unsure you should seek that independently.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ.

Read the Assessment of Value report [PDF, 3.1MB] for funds run by Barclays.

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