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New GGOF fund likes Japan, metals

Japanese equities and base metal plays are likely to have a big role in a new international fund from Guardian Group of Funds Ltd.

Launched March 3, the GGOF Global Diversified Fund has three goals: income generation, portfolio growth and inflation protection, all via "high absolute real returns," Gavin Graham, the Toronto firm's chief investment officer, said in an interview. "Resources are strong. It's the Chinese middle class, the Asian middle class," he said. Despite recent gains, many Asian stocks remain "reasonably valued."

Nine years of deflation are drawing to a close in Japan and economic growth is looking "surprisingly robust," said Mark Headley, president and chief executive officer of Matthews International Capital Management LLC and co-manager of the new GGOF fund. The San Francisco firm likes opportunities across the country's retail, banking and financial services sectors, he said in a conference call.

Meanwhile, Barrantagh Investment Management Inc. of Toronto and Lazard Asset Management of New York, co-managers of the GGOF fund, are bullish on the base metals sector.

Teck Cominco Ltd.'s plan to recycle junk electronics and extract zinc, lead and cadmium is "indicative of a strong price appreciation down the road," said Bruce Jackson, managing director of value-driven Barrantagh.

The three fund managers, along with Guardian Capital LP and Jones Heward Investment Counsel, both subsidiaries of Bank of Montreal, will each manage different aspects of the fund.

© 2007 The Globe and Mail. All rights reserved.

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