TOKYO -- Stock investment trusts focusing on foreign shares have sharply gained in popularity among Japanese investors, with the net inflow into such financial products hitting the highest amount since July 2007 in February.
There was a net inflow of 420 billion yen ($3.64 billion) for publicly offered open-ended foreign-stock investment trusts last month, according to investment research and advisory company Mitsubishi Asset Brains. The global stock rally since November and the popularity of selective investment based on themes, such as artificial intelligence, are credited for the strong showing.
The February figure translates to a fourth straight month of net inflows. Amid rising interest rates worldwide after the U.S. presidential election, investors globally have been shifting funds from bonds to stocks. As a result, the MSCI global stock index has been hovering near all-time highs lately.
Back in July 2007, high-dividend stock funds were in vogue. But the flavor of the moment is investment trusts that select stocks based on themes. For instance, Nomura Asset Management's global AI stock trust, which focuses on artificial-intelligence-related companies, had the highest net inflow among foreign-stock investment trusts in February at 160 billion yen.
Investors who are looking to capitalize on U.S. President Donald Trump's promise of beefing up infrastructure spending put funds into Asset Management One's U.S. infrastructure-related stock fund, resulting in a net inflow of 16.5 billion yen.
Legg Mason Asset Management (Japan) saw a high level of inflow into the LM Australia High Dividend Equity Fund, which pays a monthly dividend of 200 yen.
"Money has been shifting from global REIT funds, which lowered distribution, to high-dividend stock funds," said Shoko Shinoda, fund analyst at the Rakuten Securities Economic Research Institute.
At Daiwa Asset Management, the version of the Daiwa FE global value fund that comes with currency hedging attracted more funds than the one without hedging.
"Individual investors are becoming concerned about the possibility of a stronger yen due to President Trump's assertion" that Japan engages in currency manipulation to keep the yen weaker, Shinoda noted.