Katsunori Ogawa, Chief Portfolio Manager of Sumitomo Mitsui Trust Asset Management Co.’s Sakigake High Alpha funds, is ramping up investments in semiconductor-related stocks, citing the increasing demand for artificial intelligence (AI) and electric vehicles (EVs). The move comes as these stocks are perceived to be trading at attractive valuations, presenting an opportunity for investors.
In the competitive world of asset management, performance is the ultimate benchmark of success. According to Bloomberg data, Ogawa’s Sakigake High Alpha funds have distinguished themselves by outperforming over 95% of their peers over the last three years. This performance speaks volumes about the fund manager’s approach.
At the heart of this success is a well-thought-out investment strategy. The fund focuses on selecting 5-8 investment themes, with one of the current themes revolving around information technology. Under this umbrella, the fund focuses on semiconductors and AI.
Ogawa’s team meticulously narrows the list to around 30 to 50 stocks. Their criteria include evaluating fundamental factors such as price-to-earnings ratios. This systematic approach helps identify stocks with strong potential.
Key holdings
The fund’s portfolio comprises a mix of well-established companies, with some notable names in the lineup. Among its top holdings are Sony Corp., Maruwa Co., Keyence Corp., Shift Inc., Mitsubishi Corp., and Shin-Etsu Chemical Co. Notably, Disco Corp. and Maruwa Co. account for a significant portion of the fund’s portfolio, each representing more than 3% and 4%, respectively.
Semiconductor stocks: A promising bet
Given their pivotal role in the AI and EV sectors, Ogawa is particularly bullish on semiconductor stocks. He anticipates a surge in the semiconductor demand driven by AI applications. In this regard, Disco Corp. stands out as a promising investment. As AI continues to permeate various industries, the need for cutting-edge semiconductor technology is expected to rise.
The recent performance of major players in the industry further bolsters Ogawa’s confidence in semiconductor stocks. Companies like Taiwan Semiconductor Manufacturing Company Ltd. and Samsung Electronics Co. have shown signs of inventory bottoming out. This suggests a positive trend in the semiconductor market, validating the fund manager’s investment thesis.
Apart from semiconductor stocks, Maruwa Co. has captured Ogawa’s attention for a different reason. The company specializes in heat-dissipating ceramics products, a niche but essential component in the burgeoning electric vehicle and data center sectors.
EVs and data centers
Electric vehicles have been gaining traction globally, driven by environmental concerns and regulatory support. Maruwa’s ceramics products play a crucial role in dissipating heat generated by EV components, contributing to their efficient and safe operation. As the EV market continues to expand, Maruwa Co.’s products are poised to see increased demand.
**Data centers, the backbone of the digital age, are another area where Maruwa’s heat-dissipating ceramics find utility. With exponential data processing and storage demand growth, data centers require efficient cooling solutions to maintain optimal performance. Maruwa’s products align perfectly with this need, making the company a valuable player in this sector.
Final thoughts
Katsunori Ogawa’s decision to intensify investments in semiconductor-related stocks reflects his confidence in the future growth potential of the AI and EV markets. With a track record of superior fund performance and a well-defined investment strategy, Ogawa’s approach appears poised to capture the opportunities presented by these dynamic industries.
In addition to semiconductor stocks, Maruwa Co.’s presence in the electric vehicle and data center sectors adds another layer of diversification to the fund’s portfolio. As the world continues to embrace technological advancements, investors and market observers will be keen to see how these investments fare in the evolving landscape of AI, EVs, and beyond.
