Nouvel enregistrement 10

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S… Speaker 2 (Nouvel enregistrement 10)

Morning, so that's good.

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S… Speaker 1 (Nouvel enregistrement 10)

Okay,

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S… Speaker 1 (Nouvel enregistrement 10)

let's see you

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S… Speaker 1 (Nouvel enregistrement 10)

again. Morning,

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S… Speaker 1 (Nouvel enregistrement 10)

Richard. Morning, France.

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S… Speaker 2 (Nouvel enregistrement 10)

Good to see you.

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S… Speaker 1 (Nouvel enregistrement 10)

Morning.

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S… Speaker 1 (Nouvel enregistrement 10)

Okay, great.

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S… Speaker 1 (Nouvel enregistrement 10)

We've got representation from across all

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S… Speaker 1 (Nouvel enregistrement 10)

the regions now.

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S… Speaker 1 (Nouvel enregistrement 10)

So thank you for joining us.

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S… Speaker 1 (Nouvel enregistrement 10)

It's my pleasure to have Richard Kaye,

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S… Speaker 1 (Nouvel enregistrement 10)

who you all know,

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S… Speaker 1 (Nouvel enregistrement 10)

lead portfolio manager on the Japan strategy and Congest

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S… Speaker 1 (Nouvel enregistrement 10)

Growth Japan with us today.

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S… Speaker 1 (Nouvel enregistrement 10)

The reason for the call is we thought that given

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S… Speaker 1 (Nouvel enregistrement 10)

a big performance,

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S… Speaker 1 (Nouvel enregistrement 10)

the one -year performance of the strategy is now looking very good.

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S… Speaker 1 (Nouvel enregistrement 10)

interest in Japan from fund selectors and marketplaces,

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S… Speaker 1 (Nouvel enregistrement 10)

and also how Japan is positioned currently with

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S… Speaker 1 (Nouvel enregistrement 10)

quite resilient stock reserves in terms of oil and things like that.

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S… Speaker 1 (Nouvel enregistrement 10)

It would be very good to hear from Richard and his views.

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S… Speaker 1 (Nouvel enregistrement 10)

We've also put together an investment paper

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S… Speaker 1 (Nouvel enregistrement 10)

that covers those points as well,

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S… Speaker 1 (Nouvel enregistrement 10)

which was attached in the invite.

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S… Speaker 1 (Nouvel enregistrement 10)

And what we wanted to do was use this as an opportunity,

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S… Speaker 1 (Nouvel enregistrement 10)

really, perhaps with some press coverage,

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S… Speaker 1 (Nouvel enregistrement 10)

but also working with the regions to have a bit of a mini push,

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S… Speaker 1 (Nouvel enregistrement 10)

if you like,

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S… Speaker 1 (Nouvel enregistrement 10)

on Japan.

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S… Speaker 1 (Nouvel enregistrement 10)

We've got some advertising creative that's ready to go as

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S… Speaker 1 (Nouvel enregistrement 10)

well.

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S… Speaker 1 (Nouvel enregistrement 10)

We will promote the investment

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letter for our channels.

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We might do a bit of social media.

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S… Speaker 1 (Nouvel enregistrement 10)

But also we need to tie this all up with working with the press and make sure we don't eat

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S… Speaker 1 (Nouvel enregistrement 10)

our own breakfast, as it were,

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S… Speaker 1 (Nouvel enregistrement 10)

and make sure that we give press a fair crack at the whip.

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S… Speaker 1 (Nouvel enregistrement 10)

So with that,

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S… Speaker 1 (Nouvel enregistrement 10)

maybe if I just hand over to Richard just for

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S… Speaker 1 (Nouvel enregistrement 10)

a quick intro,

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discuss what he's seeing in the marketplace,

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S… Speaker 1 (Nouvel enregistrement 10)

just briefly cover the paper,

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S… Speaker 1 (Nouvel enregistrement 10)

and then we'll open it for questions and thoughts from

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S… Speaker 1 (Nouvel enregistrement 10)

the regional press teams.

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S… Speaker 1 (Nouvel enregistrement 10)

So with that,

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S… Speaker 1 (Nouvel enregistrement 10)

if it's OK to hand over to you,

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S… Speaker 1 (Nouvel enregistrement 10)

Richard. Thank you,

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S… Speaker 1 (Nouvel enregistrement 10)

Richard. David,

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S… Speaker 2 (Nouvel enregistrement 10)

thank you very much.

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S… Speaker 2 (Nouvel enregistrement 10)

And thank you and thanks to everybody on this call.

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S… Speaker 2 (Nouvel enregistrement 10)

Really excited to talk about Japan.

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S… Speaker 2 (Nouvel enregistrement 10)

Really excited for your interest.

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S… Speaker 2 (Nouvel enregistrement 10)

David and Dawn here at Congress have written this paper,

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S… Speaker 2 (Nouvel enregistrement 10)

as David just said,

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S… Speaker 2 (Nouvel enregistrement 10)

explaining some of the very important themes going on in Japan

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S… Speaker 2 (Nouvel enregistrement 10)

right now.

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S… Speaker 2 (Nouvel enregistrement 10)

If I can just make it all a bit personal,

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S… Speaker 2 (Nouvel enregistrement 10)

I've done Japan for 30 years.

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S… Speaker 2 (Nouvel enregistrement 10)

I've spoken with many of you on this call before saying Japan will be great

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S… Speaker 1 (Nouvel enregistrement 10)

again.

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S… Speaker 2 (Nouvel enregistrement 10)

Japan market will go back to its 30 -year high again.

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S… Speaker 2 (Nouvel enregistrement 10)

And I think some of you have asked lots of simple questions.

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S… Speaker 2 (Nouvel enregistrement 10)

I can see smiles and people denying around

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S… Speaker 2 (Nouvel enregistrement 10)

this screen here.

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S… Speaker 2 (Nouvel enregistrement 10)

But you're always very polite to me.

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S… Speaker 2 (Nouvel enregistrement 10)

But this year,

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S… Speaker 2 (Nouvel enregistrement 10)

actually last year,

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S… Speaker 2 (Nouvel enregistrement 10)

Japan came back to its 30 year high.

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And this year,

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S… Speaker 2 (Nouvel enregistrement 10)

Japan went.

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percent bigger than its 30 -year high,

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S… Speaker 2 (Nouvel enregistrement 10)

and this year Japan went 100 % bigger than its 30 -year high.

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S… Speaker 2 (Nouvel enregistrement 10)

Japan, as you know,

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went to 60 ,000 yen on the Nikkei,

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S… Speaker 2 (Nouvel enregistrement 10)

which is the highest the Japanese market has ever seen.

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S… Speaker 2 (Nouvel enregistrement 10)

I spent 30 years waiting for that,

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S… Speaker 2 (Nouvel enregistrement 10)

and so I'm personally very excited about what's going on in Japan,

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S… Speaker 2 (Nouvel enregistrement 10)

very excited to talk with you all about that.

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S… Speaker 2 (Nouvel enregistrement 10)

What we wrote in the paper

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S… Speaker 2 (Nouvel enregistrement 10)

About the background for that Nikkei index move,

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S… Speaker 2 (Nouvel enregistrement 10)

for that Japan market move,

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S… Speaker 2 (Nouvel enregistrement 10)

it is a lot of the story.

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S… Speaker 2 (Nouvel enregistrement 10)

We have a new,

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S… Speaker 2 (Nouvel enregistrement 10)

very exciting government in Japan.

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As you know, Japan's first woman prime minister,

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female prime minister,

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with a very reformist agenda,

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trying to engage the country in its

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S… Speaker 2 (Nouvel enregistrement 10)

own strengths,

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S… Speaker 2 (Nouvel enregistrement 10)

trying to bring out the natural...

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S… Speaker 2 (Nouvel enregistrement 10)

strength of Japanese companies through deregulation,

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even tax reform,

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not standing in the way of the great strength which Japan has

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always had.

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And that's very much the same tradition as

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S… Speaker 2 (Nouvel enregistrement 10)

the government of 10 years ago,

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the Prime Minister Abe's government.

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What we also have in Japan driving that strong market move is,

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S… Speaker 2 (Nouvel enregistrement 10)

as the paper discussed,

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Japan's geopolitical resistance.

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The fact that Japan has enormous oil reserves and has been able

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to stand the foremost crisis much better than other

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countries.

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S… Speaker 2 (Nouvel enregistrement 10)

We mentioned details in the paper,

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S… Speaker 2 (Nouvel enregistrement 10)

but the many barrels,

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S… Speaker 2 (Nouvel enregistrement 10)

200 days of barrels of oil that it has in reserves.

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S… Speaker 1 (Nouvel enregistrement 10)

smart diversification of sourcing

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with natural gas heavily dependent on Australia,

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for example.

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And that has positioned Japan very well in the current crisis and again,

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supported the markets move.

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S… Speaker 1 (Nouvel enregistrement 10)

But there's another big thing,

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S… Speaker 1 (Nouvel enregistrement 10)

which again, we discussed in the paper.

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Japan just has great companies.

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S… Speaker 1 (Nouvel enregistrement 10)

And a lot of the AI boom that everybody's talking

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S… Speaker 1 (Nouvel enregistrement 10)

about actually hasn't happened in American stocks.

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other countries' stocks so much as in Japanese stocks.

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Japanese stocks that make the equipment and the materials,

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the technology and the software that drive the chips,

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that drive AI,

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have actually been the major drivers of the markets this

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year. And even last year,

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their 60 ,000 yen Nikkei number has been driven by AI stocks.

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And our portfolio is very heavy in stocks like that.

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Not because we are AI geeks or anything.

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I'm rather cynical about AI,

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but then that would just be my age.

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These are great companies.

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They do great stuff.

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Nobody makes things like them.

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They are indispensable to the supply chain for AI.

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So just real quick,

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30 years waiting for this moment,

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and now it's come.

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A new government driving people,

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engaging people,

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including young people.

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in the future of Japan,

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great political resistance and then great companies,

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especially for the AI supply chain.

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which has driven the overall market index to this very high level.

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And again,

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if we can just put in a little plug for our fund,

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Shantana Ward and I,

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we've been doing this fund for 17 years.

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We've always believed you have to ignore index

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weights.

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You have to invest in great companies.

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We've spent a lot of time looking for those companies.

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And again,

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we have something like 20...

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3 or 4 % of our fund in AI -related companies

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that have been very important for the performance of our fund

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in absolute and relative terms,

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as David mentioned,

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were something like just over 5 % ahead

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of the index this year.

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We haven't had a song like that for a

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long time.

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We've lagged the index in the last 2 or 3 years because the market has

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S… Speaker 1 (Nouvel enregistrement 10)

been very distorted by

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GPM moves and a big focus on what people call the value

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S… Speaker 2 (Nouvel enregistrement 10)

sectors.

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S… Speaker 1 (Nouvel enregistrement 10)

We're back this year and the great companies are supporting that performance

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as the market goes to historical highs.

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Our fund has actually benefited from that and more.

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I'm going to finish with a few last words.

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We mentioned some of the other great companies in this portfolio which

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show.

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and the team and I have spent a lot of time looking

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at.

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And I just want to leave one point.

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It's not just AI.

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We have other great companies in the funds,

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including Uniqlo Fast Retailing,

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which many of you know,

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probably wear the clothing company.

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We have Japan's GLP,

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major companies come from G -I -C -H -E -G -A -I.

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It's working with Eli Lilly for an oral

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a gop drug um many companies across

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the great landscape of japanese

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corporate architecture,

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which are benefiting the fund this year.

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S… Speaker 2 (Nouvel enregistrement 10)

And again,

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S… Speaker 1 (Nouvel enregistrement 10)

helping us with absolute and relative performance,

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which I humbly suggest is actually stronger than we're seeing in most

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other developed markets of the world.

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Many of the growth people have quit the

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space.

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You can see from yourself that the growth funds in Japan have given up.

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They've closed or they've been forced to change style during the last two or three

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years.

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because of the Congress structure,

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have been allowed to continue with what we do.

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And this is a very important moment for us.

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And so thank you again for your patience.

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And I'll close the box there.

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S… Speaker 1 (Nouvel enregistrement 10)

And if people are still interested,

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S… Speaker 1 (Nouvel enregistrement 10)

please attack us with questions.

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S… Speaker 2 (Nouvel enregistrement 10)

Fabulous.

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S… Speaker 3 (Nouvel enregistrement 10)

Thank you, Richard,

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for that.

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Richard Billing in the UK,

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S… Speaker 3 (Nouvel enregistrement 10)

I know that you had some questions lined up for Richard.

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So maybe if I could start with you.

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S… Speaker 2 (Nouvel enregistrement 10)

Yeah, no,

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S… Speaker 4 (Nouvel enregistrement 10)

thank you so much,

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S… Speaker 1 (Nouvel enregistrement 10)

Richard.

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S… Speaker 4 (Nouvel enregistrement 10)

That was great.

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S… Speaker 4 (Nouvel enregistrement 10)

I mean, I have read the paper,

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but it's just good to hear your words on it.

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S… Speaker 4 (Nouvel enregistrement 10)

So the first question was about the natural

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resource situation.

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I mean, it is amazing in a way that Japan is really

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known as a country that suffers from a death of natural

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resources, particularly fuel.

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managed to weather this storm very successfully until now.

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S… Speaker 4 (Nouvel enregistrement 10)

I just wanted you to maybe say a bit more about it.

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S… Speaker 4 (Nouvel enregistrement 10)

How long -term was the strategy?

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S… Speaker 2 (Nouvel enregistrement 10)

Can they actually deal with the situation continuing

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for very much longer?

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Are they still replenishing stocks from other

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countries like Australia as time goes on or not?

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It's quite amazing,

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S… Speaker 2 (Nouvel enregistrement 10)

but I just thought you could say a bit more about that.

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S… Speaker 1 (Nouvel enregistrement 10)

Thank you very much,

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Richard.

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Yes,

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it's amazing,

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as you say,

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how Japan has emerged very strong in this crisis.

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As you correctly point out,

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Japan is the biggest developed market with no

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resources of its own in the world.

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And actually,

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that's part of Japan's whole fascination for me.

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You put 100 million people on a small habitable

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space.

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The habitable space in Japan is half of the UK.

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You give them no resources,

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you give them no army,

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and they produce one of the strongest economies in the world.

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And they do that through ingenuity.

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And that includes the diversification of

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raw materials and commodities sourcing.

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And so directly to your question,

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yes,

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on natural gas procurement,

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they've leaned heavily on Australia for a long

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time. Australia pound is about 44 .0 % of its natural gas procurement.

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Oil as a total share of resources

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in Japanese energy is actually the smallest.

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of course you can't escape using oil but it's the smallest share of oil we

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have i think a graph in the report about that yes on oil

11:36

S… Speaker 1 (Nouvel enregistrement 10)

um japan has diversified already uh beyond its

11:40

S… Speaker 1 (Nouvel enregistrement 10)

middle east procurement specifically procuring from the u .s and

11:45

S… Speaker 1 (Nouvel enregistrement 10)

Needless to say,

11:46

S… Speaker 1 (Nouvel enregistrement 10)

the Japan -US relationship is strong to the two leaders right

11:50

S… Speaker 1 (Nouvel enregistrement 10)

now and going back for a long time,

11:52

S… Speaker 1 (Nouvel enregistrement 10)

including last July trade agreements

11:57

S… Speaker 1 (Nouvel enregistrement 10)

between Japan and the US.

11:58

S… Speaker 1 (Nouvel enregistrement 10)

So Japan has a history of being very imaginative

12:03

S… Speaker 1 (Nouvel enregistrement 10)

in resource procurement because it has to be.

12:05

S… Speaker 1 (Nouvel enregistrement 10)

And that history has shown itself very clearly in

12:10

S… Speaker 1 (Nouvel enregistrement 10)

the current crisis and its resilience.

12:13

S… Speaker 1 (Nouvel enregistrement 10)

Is it just going on a little tiny bit more?

12:16

S… Speaker 1 (Nouvel enregistrement 10)

I don't want to give the impression that everything is fine and that Japan

12:20

S… Speaker 1 (Nouvel enregistrement 10)

has no problems at all.

12:22

S… Speaker 1 (Nouvel enregistrement 10)

Living in Japan,

12:23

S… Speaker 1 (Nouvel enregistrement 10)

you hear news like running out of medical gloves.

12:27

S… Speaker 1 (Nouvel enregistrement 10)

There's a famous snack made by a company called Calbi,

12:32

S… Speaker 1 (Nouvel enregistrement 10)

C -A -L -B.

12:32

S… Speaker 1 (Nouvel enregistrement 10)

If you're in Japan,

12:33

S… Speaker 1 (Nouvel enregistrement 10)

you may have seen,

12:35

S… Speaker 1 (Nouvel enregistrement 10)

you probably have seen if you've gone to convenience stores,

12:38

S… Speaker 1 (Nouvel enregistrement 10)

Calbi snacks.

12:39

S… Speaker 1 (Nouvel enregistrement 10)

They're sort of iconic.

12:42

S… Speaker 1 (Nouvel enregistrement 10)

The company has stopped producing colour packages for its

12:46

S… Speaker 1 (Nouvel enregistrement 10)

snacks and using black and white ones now because that saves

12:50

S… Speaker 1 (Nouvel enregistrement 10)

oil resources.

12:51

S… Speaker 1 (Nouvel enregistrement 10)

There are small problems of oil procurement,

12:54

S… Speaker 1 (Nouvel enregistrement 10)

even though Japan has been ingenious.

12:56

S… Speaker 1 (Nouvel enregistrement 10)

I don't let us deny that.

12:58

S… Speaker 1 (Nouvel enregistrement 10)

For a portfolio manager,

13:00

S… Speaker 1 (Nouvel enregistrement 10)

that, of course,

13:01

S… Speaker 1 (Nouvel enregistrement 10)

is an opportunity as well as a threat.

13:03

S… Speaker 1 (Nouvel enregistrement 10)

And some of our companies have already started to raise prices because of oil

13:07

S… Speaker 1 (Nouvel enregistrement 10)

procurement issues.

13:11

S… Speaker 1 (Nouvel enregistrement 10)

major chemical company in the funds called Shinetsu,

13:14

S… Speaker 1 (Nouvel enregistrement 10)

S -H -I -N -E -P -S -U,

13:16

S… Speaker 1 (Nouvel enregistrement 10)

Shinetsu.

13:17

S… Speaker 1 (Nouvel enregistrement 10)

And those people raised prices to reflect raw

13:21

S… Speaker 1 (Nouvel enregistrement 10)

materials shortage for PVC,

13:24

S… Speaker 1 (Nouvel enregistrement 10)

polyvinyl chloride.

13:25

S… Speaker 1 (Nouvel enregistrement 10)

And another company that announced some of the things recently is a sensor

13:29

S… Speaker 1 (Nouvel enregistrement 10)

company, Keyence.

13:30

S… Speaker 1 (Nouvel enregistrement 10)

I think that's strange.

13:31

S… Speaker 1 (Nouvel enregistrement 10)

You may say that oil isn't very important in the making of sensors,

13:35

S… Speaker 1 (Nouvel enregistrement 10)

but they refer to general supply chain issues.

13:38

S… Speaker 1 (Nouvel enregistrement 10)

So there are issues.

13:40

S… Speaker 1 (Nouvel enregistrement 10)

Richard, I don't want to give the impression that everything is perfect in the paradise

13:44

S… Speaker 1 (Nouvel enregistrement 10)

land of Japan,

13:45

S… Speaker 1 (Nouvel enregistrement 10)

but Japan has been far more imaginative throughout

13:49

S… Speaker 1 (Nouvel enregistrement 10)

its history,

13:50

S… Speaker 1 (Nouvel enregistrement 10)

including recently in this area,

13:52

S… Speaker 1 (Nouvel enregistrement 10)

perhaps that other countries have been.

13:53

S… Speaker 2 (Nouvel enregistrement 10)

Can I just have,

13:57

S… Speaker 2 (Nouvel enregistrement 10)

so let someone else ask a question,

13:59

S… Speaker 2 (Nouvel enregistrement 10)

but just one follow -up.

14:01

S… Speaker 2 (Nouvel enregistrement 10)

Not really related to that.

14:02

S… Speaker 2 (Nouvel enregistrement 10)

You mentioned that other growth managers had just packed

14:08

S… Speaker 1 (Nouvel enregistrement 10)

it in.

14:08

S… Speaker 2 (Nouvel enregistrement 10)

Now, obviously,

14:10

S… Speaker 2 (Nouvel enregistrement 10)

if we were doing an interview,

14:11

S… Speaker 2 (Nouvel enregistrement 10)

we wouldn't be mentioning names.

14:13

S… Speaker 2 (Nouvel enregistrement 10)

But it is interesting.

14:15

S… Speaker 2 (Nouvel enregistrement 10)

There's a sense of what proportion of your

14:20

S… Speaker 2 (Nouvel enregistrement 10)

peers in that sector basically said,

14:23

S… Speaker 2 (Nouvel enregistrement 10)

look, we need to dramatically change our strategy in order to survive.

14:30

S… Speaker 1 (Nouvel enregistrement 10)

You attempt me into saying things that I shouldn't say,

14:33

S… Speaker 1 (Nouvel enregistrement 10)

and thank you very much for the question,

14:35

S… Speaker 1 (Nouvel enregistrement 10)

Richard. Very simply speaking,

14:37

S… Speaker 1 (Nouvel enregistrement 10)

we used to think of ourselves as having about eight competitors in Japan growth,

14:41

S… Speaker 1 (Nouvel enregistrement 10)

and those eight competitors were people with over a billion dollars of strategy size

14:46

S… Speaker 1 (Nouvel enregistrement 10)

and,

14:47

S… Speaker 1 (Nouvel enregistrement 10)

let's say, five years of history in the funds.

14:49

S… Speaker 1 (Nouvel enregistrement 10)

That number we now think is two.

14:53

S… Speaker 1 (Nouvel enregistrement 10)

People can say,

14:54

S… Speaker 1 (Nouvel enregistrement 10)

oh, how do you define the two?

14:55

S… Speaker 1 (Nouvel enregistrement 10)

Well, it's what I said now.

14:56

S… Speaker 1 (Nouvel enregistrement 10)

It's a billion dollar star strategy size and five years.

15:00

S… Speaker 1 (Nouvel enregistrement 10)

plus history and the fund and consistency

15:04

S… Speaker 1 (Nouvel enregistrement 10)

to the growth style.

15:05

S… Speaker 1 (Nouvel enregistrement 10)

What happened to the other six that disappeared?

15:08

S… Speaker 1 (Nouvel enregistrement 10)

Well, three of them closed,

15:09

S… Speaker 1 (Nouvel enregistrement 10)

three of them exactly because of AUM.

15:14

S… Speaker 1 (Nouvel enregistrement 10)

Asset size reduction had to close.

15:16

S… Speaker 1 (Nouvel enregistrement 10)

And three of them,

15:18

S… Speaker 1 (Nouvel enregistrement 10)

you have to say,

15:19

S… Speaker 1 (Nouvel enregistrement 10)

they changed their style market really,

15:21

S… Speaker 1 (Nouvel enregistrement 10)

holding large constituents of the value index.

15:23

S… Speaker 1 (Nouvel enregistrement 10)

Again, that's just an objective observation,

15:26

S… Speaker 1 (Nouvel enregistrement 10)

not a comment on them.

15:29

S… Speaker 1 (Nouvel enregistrement 10)

It's a strategy choice that they made.

15:31

S… Speaker 1 (Nouvel enregistrement 10)

But the exciting thing is that if the Japan market is inherently able

15:35

S… Speaker 1 (Nouvel enregistrement 10)

to respect the great companies of Japan in AI or

15:39

S… Speaker 1 (Nouvel enregistrement 10)

all these other stuff that we talked about from...

15:42

S… Speaker 1 (Nouvel enregistrement 10)

clones, Uniqlo,

15:43

S… Speaker 1 (Nouvel enregistrement 10)

class retaining,

15:43

S… Speaker 1 (Nouvel enregistrement 10)

through to Dubai and pharmaceuticals and many other areas,

15:47

S… Speaker 1 (Nouvel enregistrement 10)

then actually that is an investment style which should work

15:51

S… Speaker 1 (Nouvel enregistrement 10)

over time.

15:51

S… Speaker 1 (Nouvel enregistrement 10)

And just because of our partnership,

15:54

S… Speaker 1 (Nouvel enregistrement 10)

our long -term view,

15:55

S… Speaker 1 (Nouvel enregistrement 10)

our ability to,

15:56

S… Speaker 1 (Nouvel enregistrement 10)

our willingness to look through this thing,

16:00

S… Speaker 1 (Nouvel enregistrement 10)

through these short term roles,

16:03

S… Speaker 1 (Nouvel enregistrement 10)

I think we've been able to hold on to that principle of investing

16:07

S… Speaker 1 (Nouvel enregistrement 10)

perhaps more easily than the others.

16:12

S… Speaker 1 (Nouvel enregistrement 10)

Very interesting.

16:13

S… Speaker 1 (Nouvel enregistrement 10)

And yeah, obviously,

16:14

S… Speaker 1 (Nouvel enregistrement 10)

we wouldn't want to get too much into the specifics of

16:18

S… Speaker 1 (Nouvel enregistrement 10)

all that.

16:18

S… Speaker 1 (Nouvel enregistrement 10)

But I just I do think it's interesting background for a piece

16:23

S… Speaker 1 (Nouvel enregistrement 10)

at the moment.

16:23

S… Speaker 1 (Nouvel enregistrement 10)

Thank you.

16:25

S… Speaker 1 (Nouvel enregistrement 10)

And more broadly,

16:27

S… Speaker 1 (Nouvel enregistrement 10)

it's interesting,

16:28

S… Speaker 3 (Nouvel enregistrement 10)

you know, Morningstar,

16:28

S… Speaker 3 (Nouvel enregistrement 10)

when they write reports about Comgest,

16:30

S… Speaker 3 (Nouvel enregistrement 10)

do talk about how we stick to our quality growth approach,

16:34

S… Speaker 3 (Nouvel enregistrement 10)

not just in Japan strategy,

16:36

S… Speaker 3 (Nouvel enregistrement 10)

but across all our strategies.

16:38

S… Speaker 3 (Nouvel enregistrement 10)

And I think it's one thing that clients.

16:41

S… Speaker 3 (Nouvel enregistrement 10)

you know, now know us for is,

16:43

S… Speaker 3 (Nouvel enregistrement 10)

you know, the rigorous application of quality growth and

16:47

S… Speaker 3 (Nouvel enregistrement 10)

not string,

16:48

S… Speaker 3 (Nouvel enregistrement 10)

as those others,

16:50

S… Speaker 3 (Nouvel enregistrement 10)

as Richard alluded to.

16:51

S… Speaker 2 (Nouvel enregistrement 10)

Great.

16:52

S… Speaker 3 (Nouvel enregistrement 10)

Thank you, Richard Billing from 4.

16:54

S… Speaker 3 (Nouvel enregistrement 10)

Maybe if I jump to Marcus,

16:58

S… Speaker 3 (Nouvel enregistrement 10)

Germany,

16:59

S… Speaker 3 (Nouvel enregistrement 10)

Austria, your thoughts or questions.

17:03

S… Speaker 2 (Nouvel enregistrement 10)

Yeah, thanks for that.

17:05

S… Speaker 2 (Nouvel enregistrement 10)

I mean, I've only came to read the white paper this morning,

17:09

S… Speaker 2 (Nouvel enregistrement 10)

but one of the major ideas of positioning Japan would be to offer an

17:13

S… Speaker 2 (Nouvel enregistrement 10)

idea for diversification away from the U .S.

17:15

S… Speaker 1 (Nouvel enregistrement 10)

market.

17:16

S… Speaker 2 (Nouvel enregistrement 10)

Because within the U .S.

17:18

S… Speaker 2 (Nouvel enregistrement 10)

market, there's the great story of

17:22

S… Speaker 2 (Nouvel enregistrement 10)

AI also connected with a risk and what happens if there's

17:26

S… Speaker 2 (Nouvel enregistrement 10)

a bubble that's bursting one day.

17:28

S… Speaker 2 (Nouvel enregistrement 10)

So an interesting potential angle in Germany would be

17:32

S… Speaker 2 (Nouvel enregistrement 10)

to offer an idea to diversify away from the US.

17:36

S… Speaker 2 (Nouvel enregistrement 10)

However, when I look at the portfolio,

17:38

S… Speaker 2 (Nouvel enregistrement 10)

I see the funds quite overweight in information

17:42

S… Speaker 2 (Nouvel enregistrement 10)

technology compared to the index,

17:44

S… Speaker 2 (Nouvel enregistrement 10)

which brings us to the questions,

17:47

S… Speaker 2 (Nouvel enregistrement 10)

how important is the whole AI story for the portfolio companies?

17:53

S… Speaker 1 (Nouvel enregistrement 10)

In the US,

17:54

S… Speaker 2 (Nouvel enregistrement 10)

there's always the question,

17:56

S… Speaker 1 (Nouvel enregistrement 10)

will the bubble burst?

17:58

S… Speaker 2 (Nouvel enregistrement 10)

Will the investments the companies do be too

18:02

S… Speaker 2 (Nouvel enregistrement 10)

high one day?

18:03

S… Speaker 2 (Nouvel enregistrement 10)

How will this be perceived by the market on the medium or on the long term?

18:07

S… Speaker 2 (Nouvel enregistrement 10)

And then the question is,

18:08

S… Speaker 2 (Nouvel enregistrement 10)

if we're playing Japan as a diversification

18:12

S… Speaker 2 (Nouvel enregistrement 10)

story,

18:13

S… Speaker 2 (Nouvel enregistrement 10)

how dependent are we on this

18:17

S… Speaker 2 (Nouvel enregistrement 10)

overall AI topic here within the portfolio?

18:21

S… Speaker 1 (Nouvel enregistrement 10)

Thank you very much,

18:22

S… Speaker 1 (Nouvel enregistrement 10)

Marcus.

18:23

S… Speaker 1 (Nouvel enregistrement 10)

And to address your first point first about Japan

18:27

S… Speaker 1 (Nouvel enregistrement 10)

as a diversification,

18:28

S… Speaker 1 (Nouvel enregistrement 10)

we of course see it that way as

18:32

S… Speaker 1 (Nouvel enregistrement 10)

well. In fact,

18:34

S… Speaker 1 (Nouvel enregistrement 10)

if you look at,

18:35

S… Speaker 1 (Nouvel enregistrement 10)

if I may put it this way,

18:36

S… Speaker 1 (Nouvel enregistrement 10)

our fund versus the S &P,

18:39

S… Speaker 1 (Nouvel enregistrement 10)

even in dollars over,

18:41

S… Speaker 1 (Nouvel enregistrement 10)

I think,

18:42

S… Speaker 1 (Nouvel enregistrement 10)

over more than a year now.

18:45

S… Speaker 1 (Nouvel enregistrement 10)

And without performance.

18:46

S… Speaker 1 (Nouvel enregistrement 10)

And if you do that same analysis,

18:48

S… Speaker 1 (Nouvel enregistrement 10)

I think during the 2010 to the 2020

18:53

S… Speaker 1 (Nouvel enregistrement 10)

period,

18:53

S… Speaker 1 (Nouvel enregistrement 10)

so the last decade,

18:54

S… Speaker 1 (Nouvel enregistrement 10)

it was a similar situation.

18:58

S… Speaker 1 (Nouvel enregistrement 10)

So in fact,

18:59

S… Speaker 1 (Nouvel enregistrement 10)

it may not seem that way,

19:01

S… Speaker 1 (Nouvel enregistrement 10)

but Japan,

19:02

S… Speaker 1 (Nouvel enregistrement 10)

the correct stocks in Japan,

19:04

S… Speaker 1 (Nouvel enregistrement 10)

were an important diversification from even

19:08

S… Speaker 1 (Nouvel enregistrement 10)

from the US index.

19:10

S… Speaker 1 (Nouvel enregistrement 10)

Now, people don't think that.

19:12

S… Speaker 1 (Nouvel enregistrement 10)

They think that the S &P has been the strongest index in the world and U .S.

19:15

S… Speaker 1 (Nouvel enregistrement 10)

Secretary has been the only place to be invested.

19:16

S… Speaker 1 (Nouvel enregistrement 10)

Obviously, it's the most liquid.

19:18

S… Speaker 1 (Nouvel enregistrement 10)

But actually,

19:19

S… Speaker 1 (Nouvel enregistrement 10)

niche funds...

19:22

S… Speaker 1 (Nouvel enregistrement 10)

choosing the correct group of companies were diversification already

19:26

S… Speaker 1 (Nouvel enregistrement 10)

against the S &P index for a long time.

19:29

S… Speaker 1 (Nouvel enregistrement 10)

And they've regained that position recently.

19:32

S… Speaker 1 (Nouvel enregistrement 10)

What about your question on the risk that we also have for

19:36

S… Speaker 1 (Nouvel enregistrement 10)

AI?

19:37

S… Speaker 1 (Nouvel enregistrement 10)

Indeed,

19:37

S… Speaker 1 (Nouvel enregistrement 10)

as you say, we have a lot of information technology,

19:40

S… Speaker 1 (Nouvel enregistrement 10)

AI -related companies in the fund.

19:46

S… Speaker 1 (Nouvel enregistrement 10)

I'll see you on that.

19:47

S… Speaker 1 (Nouvel enregistrement 10)

Like you commented,

19:49

S… Speaker 1 (Nouvel enregistrement 10)

the AI data center investment cycle can't continue at

19:53

S… Speaker 1 (Nouvel enregistrement 10)

this pace.

19:54

S… Speaker 1 (Nouvel enregistrement 10)

There are two major points to mention against that.

19:58

S… Speaker 1 (Nouvel enregistrement 10)

First, over

20:00

S… Speaker 2 (Nouvel enregistrement 10)

Half of the demand of our information technology companies is not

20:04

S… Speaker 2 (Nouvel enregistrement 10)

related to AI.

20:05

S… Speaker 2 (Nouvel enregistrement 10)

It relates to things like electric vehicle demand,

20:09

S… Speaker 2 (Nouvel enregistrement 10)

obviously a major question in Germany,

20:12

S… Speaker 2 (Nouvel enregistrement 10)

the controversial political question in Germany,

20:14

S… Speaker 2 (Nouvel enregistrement 10)

but electric vehicles,

20:15

S… Speaker 2 (Nouvel enregistrement 10)

especially in Asia,

20:16

S… Speaker 2 (Nouvel enregistrement 10)

especially in China,

20:17

S… Speaker 2 (Nouvel enregistrement 10)

are being massively stimulated by government policy.

20:22

S… Speaker 2 (Nouvel enregistrement 10)

And our companies produce the semiconductors for that electronic

20:26

S… Speaker 2 (Nouvel enregistrement 10)

issue,

20:27

S… Speaker 2 (Nouvel enregistrement 10)

electronicization.

20:28

S… Speaker 1 (Nouvel enregistrement 10)

process.

20:29

S… Speaker 2 (Nouvel enregistrement 10)

A lot of our information technology companies are also driven by the COVID

20:33

S… Speaker 2 (Nouvel enregistrement 10)

lockdown replacement cycle for electronic equipment.

20:37

S… Speaker 2 (Nouvel enregistrement 10)

So 2020,

20:38

S… Speaker 2 (Nouvel enregistrement 10)

2021,

20:39

S… Speaker 2 (Nouvel enregistrement 10)

we spent our whole time buying new phones,

20:41

S… Speaker 2 (Nouvel enregistrement 10)

game machines.

20:43

S… Speaker 2 (Nouvel enregistrement 10)

computers.

20:44

S… Speaker 2 (Nouvel enregistrement 10)

We are renewing those right now across the world and

20:48

S… Speaker 2 (Nouvel enregistrement 10)

our companies are providing the equipment,

20:50

S… Speaker 2 (Nouvel enregistrement 10)

the chips, materials for that.

20:52

S… Speaker 2 (Nouvel enregistrement 10)

So our information technology companies,

20:54

S… Speaker 2 (Nouvel enregistrement 10)

in fact,

20:55

S… Speaker 2 (Nouvel enregistrement 10)

are mostly not AI related.

20:58

S… Speaker 2 (Nouvel enregistrement 10)

And then the majority of the 50

21:02

S… Speaker 2 (Nouvel enregistrement 10)

% of our market capitalization in this fund is not information technology

21:06

S… Speaker 1 (Nouvel enregistrement 10)

anyway.

21:07

S… Speaker 2 (Nouvel enregistrement 10)

it comes like um my colleague shantana

21:11

S… Speaker 2 (Nouvel enregistrement 10)

has covered that company for over 20 years um it comes like

21:15

S… Speaker 2 (Nouvel enregistrement 10)

two guys c -h -u -g -a -i making the mobile toy the oral

21:19

S… Speaker 2 (Nouvel enregistrement 10)

g -l -p um drug

21:22

S… Speaker 2 (Nouvel enregistrement 10)

And we have a lot of companies that are involved in the transformation of

21:26

S… Speaker 2 (Nouvel enregistrement 10)

Japan itself as a society.

21:28

S… Speaker 2 (Nouvel enregistrement 10)

And companies are involved in the automation and

21:32

S… Speaker 2 (Nouvel enregistrement 10)

the software revolution that's going on in Japanese society

21:36

S… Speaker 2 (Nouvel enregistrement 10)

to deal with the changing labor force,

21:40

S… Speaker 2 (Nouvel enregistrement 10)

the decline of young people and so on.

21:43

S… Speaker 1 (Nouvel enregistrement 10)

And those companies,

21:44

S… Speaker 2 (Nouvel enregistrement 10)

the changing Japan portion of our portfolio are as big a

21:49

S… Speaker 2 (Nouvel enregistrement 10)

weight as the inflation technology weight.

21:51

S… Speaker 2 (Nouvel enregistrement 10)

And we think they represent a very important hedge.

Nouvel enregistrement 10

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