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Fund research

Man GLG Japan CoreAlpha: December 2023 fund update

In this fund update, Lead Investment Analyst Kate Marshall shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Man GLG Japan CoreAlpha fund.

No recommendation - No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment, and pension rules may have changed since then.

  • Lead manager Jeff Atherton has over three decades of experience investing in Japanese companies

  • We think the fund's a good option for exposure to large, value-focused companies

  • The fund performed well this year as value investing remained in favour, although this is over a short time frame

  • This fund is on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits into a portfolio

The Man GLG Japan CoreAlpha fund aims to provide investors with long-term growth ahead of Japan’s TOPIX and Russell/Nomura Large Cap Value benchmarks. The fund managers are contrarians, and prefer to go against the herd by investing in larger, more-established Japanese companies that are unfashionable and out of favour. This is a style known as value investing and the fund managers' discipline in this style sets them apart from their peers.

We think this fund could work well in a global investment portfolio designed to provide long-term growth or sit well alongside a Japanese fund using a growth-style investment approach or focused on smaller or medium-sized companies.


Jeff Atherton, Head of Japanese Equities at Man GLG, has managed Japanese funds since 1990. He's worked for several companies including Insight Investment and Société Générale. Over this time, he's built a deep understanding of the Japanese market.

Atherton joined Man GLG in 2011 as co-manager of the Japan CoreAlpha fund. He took over as lead manager in January 2021, after former lead manager Stephen Harker and co-manager Neil Edwards announced their retirement. Atherton worked alongside Harker for over a decade, using the same value and contrarian investment philosophy, and it's a style he's used throughout his career.

Atherton has the support of co-manager Adrian Edwards and portfolio managers Stephen Harget and Emily Badger, who help with idea generation, the construction of the fund and provide challenge around each investment decision. The team is purely dedicated to the Japan CoreAlpha strategy.

Atherton is a highly experienced Japanese equities investor, and we believe he's capable of leading the team and fund successfully going forward.


The team uses a longstanding investing process – investing in companies at a lower share price than their true worth. Lower valuations are crucial to their process, and they emulate Warren Buffett's approach by being greedy when others are fearful.

The team don't invest in ‘cheaper' companies purely because they're cheap, they need to believe the company has the potential to recover. Sometimes a company's assets or profit potential isn't fully reflected in its share price, which could be for several reasons. It might be they've not hit their targets, perhaps there's been a change of management, or maybe there's just a gloomy investor outlook for their part of the market. If this is the case, and the company undergoes a turnaround, the true value of the company could be realised, and the share price could rise. This style is known as value investing.

The team focuses on companies they believe are dominant in their industry, in a good financial position and run by quality management. When they feel the company is popular again and the share price has recovered, they'll sell and move onto the next opportunity. This discipline means the managers tend to invest in relatively few companies, so each one can make a significant contribution to returns, although it increases risk.

The share prices of many companies in the fund performed well over the past year. In keeping with their process, the managers have sold or reduced some of those that have done well, and used the profits to invest in other undervalued opportunities where a recovery is yet to happen.

Examples of companies that have performed well and since been reduced in size include Mitsubishi Chemical and Mitsubishi Real Estate. Elsewhere, new companies added to the fund this year include car maker Toyota, electronics giant Sony and communication services firm SoftBank.


GLG was founded in 1995 and established itself as one of the largest alternative asset managers in the world. In April 2009 GLG took over the London-based division of Société Générale Asset Management (SGAM), which expanded GLG's investment capabilities and distribution network. GLG was acquired by Man Group in 2010 and was known thereafter as Man GLG.

Man GLG offers a diverse range of funds encompassing equities, fixed interest and alternative investments. The firm continues to invest in talent, technology, and research, giving fund managers every opportunity to perform well over the long term. They promote an open and collaborative culture where the sharing of ideas and debate is encouraged. The managers and the wider team invest a significant amount of their own money in the fund. We feel their incentives are aligned with those of investors.

ESG integration

As a firm, Man Group recognises the importance of Environmental, Social and Governance (ESG) factors. It allows each fund manager autonomy to apply ESG analysis in a way that works for their investment strategy. Each investment team has access to Man Group's ESG Analytics tool, which helps the team monitor non-financial risks and analyse ESG factors on both a single company basis and across the strategy. All Man Group funds are prohibited from investing in producers of coal (30% revenue threshold), controversial weapons and tobacco.

The firm's Stewardship team exercises all voting rights where practicably possible, in accordance with their voting policy, with basic headline voting statistics published on their website quarterly. Fund managers also engage with the companies they invest in.

The fund managers fully integrate ESG analysis into their investment process. They work closely with the in-house Responsible Investment team, identifying companies that use more sustainable practices and those that don't. A low ESG score isn't necessarily a reason for them not to invest though, providing that company can demonstrate what they are doing to improve, such as reducing their emissions.


This fund usually has an ongoing annual charge of 0.90%, but we've secured HL clients an ongoing saving of 0.10%. This means you pay a net ongoing charge of 0.80%.

The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. The HL platform fee of up to 0.45% per year also applies.

Please note the fund's charges can be taken from capital. This increases the yield, but reduces the potential for capital growth.


Since Atherton joined Man GLG as a portfolio manager in 2011, the fund's outperformed both the TOPIX and Russell/Nomura Large Cap Value benchmarks. It hasn't been a smooth ride though as the team's investment style hasn’t always been in favour.

Value underperformed growth for many years and experienced its worst year in recorded history during 2020 as the coronavirus pandemic took hold. However, the announcement of the first COVID-19 vaccine in November 2020 acted as the catalyst for a comeback in value investing.

Since Atherton became lead manager in 2021, the fund has returned 53.48%* versus the IA Japan sector average return of 2.14%. The return of value investing helped, as has improved performance from companies and sectors that are more sensitive to the health of the economy, including financials. Though past performance isn't a guide to future returns.

This year some of the best-performing companies in the fund have been those that are making strides in corporate governance improvement. Part of the reason for this is the ongoing push by the Tokyo Stock Exchange to improve the corporate governance standards of Japanese companies. This has been ongoing for several years but picked up momentum in 2023. These changes have had a greater impact on companies with low valuations, as many were seen to have lower corporate governance standards.

Companies that have recently announced changes to the way they allocate capital include Toyota and electronics firm Panasonic. Shareholders have taken the news well and this benefited the fund’s performance.

Investors should remember though that different investment styles will come in and out of favour, so there will be times when the fund won’t perform as well. We saw this in November, when higher-growth technology companies performed better, to which the fund doesn’t have as much invested.

Annual percentage growth

Nov 18 - Nov 19

Nov 19 - Nov 20

Nov 20 - Nov 21

Nov 21 - Nov 22

Nov 22 - Nov 23

Man GLG Japan CoreAlpha






IA Japan






Past performance isn't a guide to future returns.
Source: *Lipper IM to 30/11/2023.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.
Written by
Kate Marshall
Lead Investment Analyst

Kate leads a team of Investment Analysts and is a member of the Senior Research Team. She provides oversight and challenge to fund selection across all sectors on the Wealth Shortlist, and votes on all proposals.

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Article history
Published: 7th December 2023