The easiest way to invest in Japan ⛩️

🐳 are seemingly bullish about Japan, you can gain some exposure with these

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Move aside China, it's Japan's (stocks) time to shine 🍙

This has been a year of rotating investing narrative, and thanks to Buffett and a few big funds, the ball is now in Japan's court.

Japan’s woes

Investing in Japan stocks used to be unpopular due to unaligned motivations between foreign shareholders and the management.

Today, we see a shift in the way Japanese (listed) companies are being run - dividends and share buybacks are picking up in the market, reaching an all-time high in 2022.

While forex risk still looms over investors, such changes were welcomed by foreign investors.

🐳swimming in

Such moves have attracted the attention of whales who are hunting for alpha. 🌊

Big names like JPMorgan and Morgan Stanley have been buying up Japanese stocks.

Foreign investors bought $15.6 billion worth of Japanese stocks last month, the highest monthly amount since October 2017,

Japan Exchange Group

And of course, there’s:

Buffett had invested in Japan since 2020.

Currently, he is known to be invested in 5 Japanese Trading Houses through Berkshire Hathaway.

Buffett has also stated that he will continue to look for opportunities in the Japan market at the latest Berkshire Hathaway AGM.

With funds flowing into the Japan stock markets, its no wonder that after 33 years, the Nikkei Stock Average finally broke its 1990 all-time high, and doesn’t seem to be stopping:

With smart money moving into Japan, you may be thinking of riding its growth.

You could study the Japan markets, get key financial data from Nikkei and spend days to find suitable Japanese stocks for your portfolio.

Or, you could get exposure to the Japanese markets through ETF.

2 Japan ETFs to 👀

💡WisdomTree Japan Hedged Equity ETF (DJX)

DJX gives you exposure to Japanesvidend paying companies, especially those with revenue stream from export sales. It currently has 440 holdings.

And its top 10 holdings include:

1. Toyota Motor Corp 4.41%

2. Mitsubishi UFJ Financial Group 3.83%

3. Sumitomo Mitsui Financial Group 2.96%

4. Mitsubishi Corp 2.89%

5. Japan Tobacco Inc 2.68%

6. Mitsui & Co Ltd 2.67%

7. Takeda Pharmaceutical Co Ltd 2.56%

8. Tokyo Electron Ltd 2.34%

9. Shin-Etsu Chemical Co Ltd 2.19%

10. Tokio Marine Holdings Inc 2.19%

📈This was its past 5 year performance:

💡Xtrackers MSCI Japan Hedged Equity ETF (DBJP)

DBJP gives you exposure to large and mid cap Japanese stocks and currently has 242 holdings. The top 10 holdings include:

1. Toyota Motor Corp 4.29%

2. Sony Corp 3.52%

3. Keyence Corp 2.77%

4. Mitsubishi UFJ Financial Group 2.29%

5. Tokyo Electron Ltd 1.84%

6. Daiichi Sankyo Co Ltd 1.78%

7. Shin-Etsu Chemical Co Ltd 1.63%

8. Hitachi Ltd 1.57%

9. Sumitomo Mitsui Financial Group 1.55%

10. Daikin Industries Ltd 1.50%

📈This was its past 5 year performance:

You’d noticed that both of these Japan ETFs are hedged.

This is because…

⚠️Currency Risk⚠️

forex risk is real.

tbh, the best use for Japanese Yen is to buy 🍙 during your next Japan trip, instead of being a store of value.

Look into "hedged" version of JPN ETFs. These tend to deliver better returns due to the hedging done against JPY.

The downside is that their expense ratio tend to be slightly higher.

🎢Japan’s rising popularity, but manage your risks

Whether or not you decide to get some exposure to the Japan stock markets, remember to manage your portfolio allocation according to your own risk level!

Stay safe.

Do not go all in!