There are few self-deprecating fund managers, but I discovered one last week: James Salter of Zennor Asset Management. What a pleasant surprise he turned out to be when he spoke candidly about investing – instead of inflating the funds he manages for investors.
James, one of the founders of investment house Polar Capital in 2001, founded Zennor three years ago. It is a company that focuses purely on obtaining returns from the Japanese stock market.
Japan is part of the investment universe that James and co-investment manager David Mitchinson know well. Together they managed Japanese portfolios for many leading investment brands, including JP Morgan and Schroders.
The pair now manage two funds, Zennor Japan and Zennor Japan Income. Although the second fund is less than a year old and has £44m in assets, Zennor Japan has been around since 2021 and has grown to £440m.
The Japanese stock market has performed well over the past year, with the average Japanese investment fund returning just under 10 percent – figures tempered by a strong pound against the yen. Zennor Japan has posted a respectable gain of 14 percent.
Hidden Gems: Zennor’s James Salter says the yen will rise if Japan raises rates
James, a long-distance open-water swimmer who has swum the Channel, is uncomfortable with marketing his own investment property. He prefers to stick to money management – and then leave it to others to decide whether he and David are worth supporting.
He is also outspoken about the state of Japan’s stock market. Unlike other investment experts, James urges caution. He believes much of the foreign money poured into Japanese stocks has been “poorly targeted.”
He describes it as classic ‘buy high, sell low’ investment behavior.
James argues that the market is not immune to global shocks. “If the U.S. economy goes into recession, all chances are gone,” he says. “It would have a negative impact on many important stocks, such as Japanese technology companies, which have risen in price on a wing and a prayer.”
In economic terms, he describes Japan as the barnacle sitting on the whale that is the United States. If the whale gets into trouble, the barnacle will suffer too. He also believes that Japan will not escape the consequences of an escalation of geopolitical tensions between China and Taiwan.
All fairly self-explanatory – and refreshingly so.
On the plus side, he says the yen will rise in value as Japan raises interest rates, boosting market returns for UK investors. And as Joe Bauernfreund of Active Value Investors puts it in this week’s Fund Focus, there are many hidden gems in the Japanese PLC universe that are crying out to be discovered.
“Japan is not a get-rich-quick story,” he concludes. “It’s a slow burn.”
In other words: commit money to the sector in phases and invest for the long term.
Website Trustnet is a good source of information about funds that invest in Japan. Zennor Japan can be purchased through the AJ Bell investment platform, while its sister income fund is available through Hargreaves Lansdown.
Fixed rate bond scammers are back – and they’re slicker than ever
Last spring, retired businessman Ron Newman (and thousands of other people) was besieged by online scammers.
Every time he turned on the computer in 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 MEVR.
Fortunately, as we reported on these pages at the time, 86-year-old Ron was never fooled by these fraudulent offers. He destroyed them while helping us ensure that the companies whose brands had been cloned did everything in their power to shut down the fraudsters’ websites.
Unfortunately, the scammers are back. Last month Ron received an email purporting to be from Primark about an ‘exclusive’ investment opportunity he couldn’t miss. It said the retailer – a “pioneer in affordable fashion” – had joined forces with “financial titan” Morgan Stanley to offer a bond paying 7.25 percent. “A fusion of style and finance,” the email trilled.
Ron admits that using two premium brands in one email made him wonder if the bond offer was real this time. So just in case, he forwarded the email to me to check.
When I clicked on the link to register for the bond, it quickly became clear that it was a scam.
The page you go to contained few important details – apart from the need for a minimum investment of $10,000 (£8,000) – and many further links (four of them) allowing you to make your investment straight away. The following is urged: ‘Act quickly as there are only limited bonds available.’
Although Morgan Stanley staff would not comment on the offensive email when I sent it to them, the investment bank did confirm that it was a scam. So if you receive this email in the next few days (or have already done so), please ignore it.
Better yet, report it at: fca.org.uk/consumers/report-scam and then message me at: jeff. prestridge@mailonsunday.co.uk.
This mutual flourishes… 100 years later
Think about building a society, think about the whole country. But there are plenty of other societies – 41 in fact – that, like Nationwide, are doing a great job for savers and borrowers, keeping branches open and supporting communities.
Among them is Vernon, based in Stockport, Greater Manchester. Next month, this health insurance fund will celebrate its 100th anniversary with a smile. Why? Because it blooms.
The savings and mortgage portfolios are growing and the six branches have never been busier. There are even rumors about new branch openings. Never!
To mark the centenary, Vernon has set up a charitable foundation that will gradually distribute £100,000 of funds to support businesses and charity work in Greater Manchester and Cheshire. How brilliant.
In a world where big financial brands dominate – but often disappoint with appalling customer service – we must cherish the Vernons of this world, who stand squarely 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, crazy vet bills and rising insurance premiums take a toll on their finances.
According to dog rescue charity Dogs Trust, ‘dogflation’ is at 9 percent – 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 wanting to surrender their pets, and the problem won’t go away without government intervention (for example a VAT moratorium on pet food and vet bills).
Insurers are of course having a field day charging owners of some dog breeds annual premiums of more than £1,500 – while bombarding them with a mix of excesses and copay costs (a fixed percentage of the vet’s bill) when they get a submit a claim. Scandalous.
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