The Baring Asset Management Multi Asset Fund, which celebrates its fourth year anniversary this year, has increased its Japanese equity exposure from zero at end-2012, to 4 per cent currently.

Since its launch in 2009, this is the first time the fund has held an allocation to Japanese equities.

“We believe the recent recovery in Japanese equities is sustainable given the authorities’ commitment to manipulating a weaker yen and boosting a flagging domestic economy. The measures taken by the Bank of Japan appear to be more credible than anything we have seen in the past,” said Andrew Cole, manager of the Multi Asset Fund at Baring.

"As such, we believe Japanese equities are set to provide good opportunities for investors. There are signs of traction in the Japanese economy as the sentiment of small firms, consumer confidence and industrial production growth have started to improve," said Cole.

Meanwhile, Baring has downgraded sterling and the yen, as there seems to be a high degree of tolerance for depreciation given the weakness in these economies. The percentage of assets hedged into sterling has been reduced from 79 per cent in 2012 to 68 per cent in early 2013 across the firm’s multi-asset portfolios. The fund has also reduced its holdings in gold, and sold Australian bonds, as government debt in safe haven countries comes under pressure, the firm said in a statement.

The Baring Multi Asset Fund had £335 million (around $506 million) in assets under management at end-February 2013.