a topperforming equity fund is pocketing gains on japanese chipmakers to buy shares left behind during the market’s worldbeating rally the alma eikoh japan large cap equity fund which is outperforming 99 of peers this year has cut its position in renesas electronics corp by almost a third over the past month as the stock more than doubled in value year to date according to james pulsford who comanages the ¥1266 billion 875 million fund some of that money went into “high quality” defensive names such as noodle maker nissin foods holdings co and soap producer kao corp “we’ve recycled some of the things that have done well into some of the recent poor performers with strong fundamentals” said pulsford a londonbased fund manager at alma capital pulsford’s view may serve as a reality check for those investors betting that tech shares will continue to surge amid an artificial intelligence boom that has helped lift japan’s stock market to its highest level in 33 years his take on consumerstaple stocks comes as analysts at goldman sachs group inc recommend investors underweight sectors including food energy construction and pharmaceuticals semiconductors are still the top allocation of the alma fund with a weight of more than 10 according to data compiled by bloomberg pulsford’s overweight position in chips has helped the fund return more than 30 this year outperforming a 23 gain in the topix while pulsford said he would be “happy to buy more” shares of renesas given the company’s longterm potential the stock needs to cool down first shares are trading at 12 times expected earnings double the level a year ago in the meantime the fund manager is betting that nissin foods could benefit from strong margin growth as income disparity may drive demand for cheap products with good value he expects kao’s next quarterly results to bottom out as the company finally reaches a tipping point where pricing gains start to outweigh higher raw material costs the fund is also overweight defenserelated companies such as mitsubishi heavy industries ltd and nec corp which pulsford said will benefit from increases in government spending “we have relatively high turnover” pulsford said “if we change our mind on the stock i want to be able to sell it preferably within a week without much market impact”