Japan comes out on top

Japanese and US companies are among the worlds top performing companies, according to recent statistics.

However, the analysis carried out by Fidelity International, also found that their markets in aggregate are among the worst performing.

Using the MSCI World Index to study the 20 best performing companies each year since the turn of the century, the analysis reveals that Japanese and US companies dominate the top of the table.

Jorma Korhonen, manager designate of Fidelity Global Special Situations, said This analysis underlines the importance of stock selection for good, risk-adjusted returns. While the more volatile markets had the best performance over the period, the best stocks were found in very different places. For example, while Japanese and US markets have generally performed badly compared with other markets over the last seven years, individual stocks from these markets featured heavily in the best performers.

At the end of 1999, Japan claimed 12 of the top 20 slots half of which were in the top ten. The UK had the second best showing with four companies, with the US, Hong Kong and Singapore picking up the remaining places. Japanese companies also featured heavily in the tables in 2000, 2002, 2003 and in 2005.

US companies started gaining places in 2001 with 10 companies in the top 20 performers. They again pipped Japanese companies to the top spot in 2004.

However, the aggregate performance of the Japanese markets over the same period has been among the worst in the world. Cumulative performance puts both markets in the bottom five with Japan returning -14.9 per cent and the US returning -15.6 per cent.

Finland was the worst performing market, falling 46.6 per cent followed by the Philippines and Taiwan.

Korhonen said: For stock pickers, market returns have little to do with the increase in value of a particular company the fundamentals of that stock are the drivers rather than the market.

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