Energy is a large and complex sector. The sector’s broad sub-industries can be divided into a “value chain,” each segment of which has different characteristics and offers different investment opportunities.
Japanese equities are currently trading at compelling valuation levels compared to other developed equity markets around the world and relative to their own historical averages. We believe the Japanese market deserves a closer look.
With many small- and large-cap funds extending their reach to the mid-cap space, some investors may assume they have covered all asset classes. They could be missing out on the power of a mid-cap allocation.
Increased attention is being paid to the inclusion of focused mutual funds in portfolio allocations. Studies have shown that concentrated portfolios can provide meaningful performance advantages over time.
When investing in Japanese businesses, we believe it is imperative to select a manager who is immersed in the culture and can perform in-depth, company-specific research to build a concentrated portfolio of Japanese companies that can outperform a benchmark and weather volatility.
Midstream energy companies have long been attractive to yield-seeking investors. With historically low valuations and the potential for stock buybacks and rising payouts, now may be an extremely opportune time to consider adding exposure to the sector.
We believe Japan is on the path to economic revival. To reverse a long period of stagnant economic growth and deflation, Prime Minister Abe and his government initiated an ambitious economic revitalization plan centered on monetary and fiscal stimulus and structural reform, which has resulted in measurable progress.
Natural gas has become one of America’s most important domestic energy solutions. Over the past 10 years*, U.S. consumption of natural gas has risen 28%, even though overall energy consumption declined slightly.
For decades, investors have relied on traditional balanced funds to gain portfolio diversification and minimize volatility. With a classic 60% allocation to equities and a 40% allocation to fixed income, balanced funds have historically provided long-term oriented investors with impressive relative capital appreciation but with lower volatility as compared to an all-equity portfolio.