The head of tactical asset allocation at the group manages more than $28bn worth of assets across Fidelity’s multi-asset range, including the £701m Fidelity Multi Asset Strategic and £599m Fidelity Multi Asset Growth funds. He has moved to an overweight position across the range, as a result of the growing strength of the dollar and the Bank of Japan’s stimulus measures.
"Japan is our favourite equity market. Japan benefits from dollar strength and it has very positive domestic policy settings from an equity investor’s point of view," said Greetham (pictured).
"The Bank of Japan has announced aggressive Fed-style QE [quantitative easing] with the aim of doubling the monetary base by late 2014."
"Moreover, Japan will also implement fiscal expansion so there is no danger that this money lies dormant. Signs of a recovery in confidence are already evident."
This view is in direct opposition to FE Alpha Manager Iain Stewart, who told FE Trustnet earlier this week that structural reform in Japan is virtually impossible.
Japanese equities have led the recent rally, with the Topix outperforming all other developed market indices in 2013.
Performance of indices in 2013
Source: FE Analytics
Greetham is positive on equities in general and has a large overweight in them across his portfolios. He has recently cut back on his exposure though, following the strong run.
"The investment clock is in the equity-friendly disinflationary recovery phase of the global business cycle, with growth indicators positive and inflation indicators pointing downwards on the back of continued commodity price weakness," he explained.
"However, after an eight-month upswing, growth lead indicators are close to peaking and US economic data has surprised negatively. We reduced our large overweight in risk assets in March, primarily by selling commodities."
While Greetham believes a stronger dollar will have a positive impact on Japan, he thinks the opposite is true of other asset classes, including emerging markets and commodities.
He commented: "We see commodity weakness as a side effect of US dollar strength rather than global economic weakness. The fact gold has been hit particularly hard tells you this is not a 'risk-off' move."
"Improvements in the US property market make it possible to imagine a rise in US interest rates in the next two or three years and this is supporting a trend of dollar strength that we expect to continue."
"Irrespective of our overall position on cyclicality, this leads us to favour stocks over commodities."
"Dollar strength is also a headwind for emerging market equities and we would use a bounce to reduce exposure further," he added.
A number of Japanese investment trust managers have recently spoken of their optimism surrounding the Bank of Japan’s policy measures.
Nicholas Weindling, manager of the JPMorgan Japanese Investment Trust, said: "One consequence of the prospect of looser monetary policy in Japan has been a much weaker yen."
"This is important because many of Japan’s major competitors are in these regions. The boost to competitiveness should be substantial."
"Although the stock market has rallied in recent months it is still attractively valued, at around 40 per cent beneath the highs of the summer of 2008."
"On a price/book value basis Japan trades at a large discount relative to its own history and other major markets."
"On a price/earnings basis it trades in line with other major markets but has much better earnings momentum, not only for 2013 but also 2014."
Weindling thinks a global recovery is likely to favour Japan more than any other developed nation.
"The improving global economic outlook favours Japan," he said. "It is important to remember that during the 2008 financial crisis it was Japan that suffered the worst recession of any of the G8 nations."
"Conversely, when the global economy recovers we expect the Japanese economy to benefit."
"Indeed, the stock market is even more geared to this trend, with manufacturing accounting for over 50 per cent of the Topix index, versus around 20 per cent of GDP," he added.
Sarah Whitley, manager of the Baillie Gifford Japan Trust, was a little more muted: "There is now a uniformity of purpose in Japan to try and solve some of the problems that have been intractable since the notorious Japanese bubble of the late 1980s."
"Although the intervening period has not really been the much written about ‘lost decade’, much needs to be done to make Japan more internationally competitive in non-manufacturing segments of the economy, as well as to meet the challenges of an aging society and high levels of government debt."
"Abenomics may not be the complete answer, but it is at least addressing the problems."
Multi-regional managers who are also positive on Japan include Ruffer’s Steve Russell, Miton’s James Sullivan and Investec’s Alastair Mundy.
Greetham has been running portfolios at Fidelity since May 2006. Over that period he has returned 41.48 per cent, beating his peer group composite by around 10 percentage points.
Performance of manager vs peer group since May 2006
Source: FE Analytics
Among the funds Greetham runs are his multi-asset allocator range – low-cost options that predominately use passives to give investors exposure to a number of different risk profiles.
Among these is Fidelity Multi Asset Allocator Growth, which has an ongoing charges figure (OCF) of 1.19 per cent.