A bet on ESG criteria and a rush among Japanese investors to own foreign stocks, particularly in the technology space, has proved to be a winning combination for a domestic fund managed by Morgan Stanley Investment Management.
Launched in Japan last month, the Global ESG High Quality Growth Equity Fund, run by the U.S. asset manager and owned by Japan’s Asset Management One Co., has raised an initial amount of ¥383 billion ($3.6 billion), the most for a new offering in Japan in 20 years, according to data compiled by Bloomberg. That also makes for the second-biggest launch ever among all stock funds in the nation, behind the Nomura Japan Equity Strategy Fund, which back in 2000 had an initial value of ¥792.5 billion.
The new offering adopts a similar strategy to Morgan Stanley’s $15.6 billion tech-heavy Global Opportunity Fund, with eight of their 10 biggest holdings being the same. The top four stocks — Amazon.com Inc., TAL Education Group, Mastercard Inc. and ServiceNow Inc. — account for about 30 percent of the portfolio for each fund.