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Japan Is Back… But Should You Invest?



Japan Is Back… But Should You Invest?

Ad Japanese equities have rallied strongly yet they’re still trading at almost half the valuation of the US market. That sounds like a contradiction. For decades, rallies in Japan have promised a renaissance and then quietly fizzled out. But this time, something important has changed. In this video, I want to walk through why Japan’s market is being re-rated and whether a Japan overweight actually makes sense in a portfolio that’s become heavily dependent on the US. And if you want to get exposure to Japan, I’ll also share some ideas on how to do that.

For more information on the Schroder Japan Trust, please visit https://bit.ly/4bw84SY

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We recommend you seek financial advice from an Independent Adviser before making an investment decision. If you don’t already have an Adviser, you can find one at http://www.unbiased.co.uk or http://www.vouchedfor.co.uk

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Timestamps
00:00 Introduction
00:31 Valuation
01:36 Deflation ➡ Inflation
02:59 Domestic Investor – Stock Buying & NISA
04:20 US Diversification & Corporate Governance
08:16 Risks
10:26 How To Get Japan Exposure

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Take A Look At Some Of My Other Videos
📹 Investment For Beginners playlist https://www.youtube.com/playlist?list=PLlqeAQqQK7TcG9QNlRJ_QjI8iX_q_I8jo
📹 Investing For Retirement playlist https://www.youtube.com/playlist?list=PLlqeAQqQK7TcWFuRd51gkPyAGleZRvGcN
📹Investing With Vanguard playlist https://www.youtube.com/playlist?list=PLlqeAQqQK7TfMV4S_51E_zmbMio4UNBtM
📹 Portfolio Building Blocks playlist https://www.youtube.com/playlist?list=PLlqeAQqQK7TdRdp-hLnL5oxsaRjJZVSyn

DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.

38 Comments

  2. @heikom7646 on

    Thank you for these videos! I’ll stay with a global index plus some Ex-US, which also increased the Japan exposure. What do you think about the current Indian market situation?

  3. @beestmode on

    Enjoyed that Ramin, thanks.

    I’m moving to Japan this year and will open a NISA, but I believe you can only invest 1m yen per year within them, which is just shy of £5k at current exchange rates.

    As most of my financial assets are held in the UK, including a DB pension and a global index held within an ISA, I’m trying to work out whether the money I remit to Japan should be broadly invested in Japanese stocks, or whether I should continue with a more global approach. If I do go with Japanese stocks then I guess I wouldn’t have the worry about hedging the currency.

    Would welcome your thoughts

  4. @hmartinlb on

    Made nice returns in 2023 and 2024 with hedged japan etf after arriving to the party a little too early and underperforming in 2022 but have since closed my position. Political situation has become unpredictable and the valuations don't look as attractive anymore. There's other assets that look more promising right now.

  5. @infour44 on

    I have a very small position with VDPG, which is ex Japan. My Japan exposure is confined to within a global. I did note a few years ago that Buffet had made some investments in Japan’s bigger businesses such as Toyota and Mitsubishi.

  9. @jayplays568 on

    Thanks for this. Are you investing in this via your "fun" portfolio or are you taking a view and deliberately increasing your exposure over and above what is in your core global tracker?

  11. @mikew5274 on

    I have about 7% exposure due to the Japan holdings in various global equity funds…I had increased that last year to 12% via two active funds Man Core-alpha hedged and Morant Wright Japan but I sold both a few weeks ago after Iran kicked off as Japan I think will suffer from the oil problems. Will go back into them once the picture is clearer about the Middle East as long term I do like Japan. It’s not just Japan, I’m holding off deploying any dry powder right now, got about 10% sitting in cash from pre Iran tweaking which I hadn’t deployed (luckily)

  12. @philipnorbury354 on

    Appreciate that Ramin. I recall the heady days when Japan was outperforming globally and I wonder if balance and flow is returning? Demographics is a concern and farming is being hit hard by a dearth in farmers. However beyond all the analysis the ethic that provides reliable uncomplicated cars that are originated and designed with love of quality and reliability. Fast spiky growth from China by comparison I feel is precipitous. There is something at the heart of what Japan does that is allowing the quality of what you do to be the backbone of long term value. Norbs57.

  13. @guantou2520 on

    I have SJG and NAVF which appears to cover Japan quite comprehensively with zero overlap: growth, value and income plus large medium and small caps.

  15. @Jalleur14325 on

    Ramin thanks for your continued calming guidance. I have noticed some investors have sold all their stocks at this point as the mayhem and destruction escalates. Wondering what your thoughts are? Are we heading much lower?

  16. @shoos9315 on

    Watch the 3% entry and 3% exit charges for the Amundi ETFs. Most Vanguard, iShares and UBS ETFs don't have those. Always read the Key Information Document!

  17. @carolinewilson97 on

    Bought a Japanese etf a few years ago but stopped buying last year. I like their technology from gaming to electronics to surgical tools ( surgical blades used to be folded and replicated exactly the same as a samurai sword but now the process is different) to manga, it's worlds apart and totally different. I will resume at a slower rate once the mayhem is over, my Nordic etf is the same but I trickle into that periodically, the Nordic etf has remained steady throughout the mayhem and the Novo nordisk trials & tribulations, I'll be drip feeding into anything I think will be on the up at present rather than be all in. Good video.

  19. @djustinparks on

    Interesting timing of this Ramin as I’ve just explored Asia (Korea, Hong Kong, Japan) due to impact from the current Iran conflict, along with the nervousness of the Mag 7 on broader US based stocks.

  20. @Theglobalpeace on

    Thanks for this video. Please do a video on recent private credit market issues as below:
    : BlackRock just capped withdrawals on its $26 billion private credit fund.**

  23. @dougal6569 on

    Ramin, I don’t know when this was prepared, but you didn’t make any comment whatsoever on the impact on Japan from King Donald’s crusade.
    Excellent analysis, as ever, but now there’s this other elephant in the room!
    Isn’t Japan particularly exposed to Gulf hydrocarbon supply problems? And the longer the war goes on, the worse for Japan? So the war seems particularly relevant to discussion of Japan’s economic prospects.
    I feel strongly that “projections for 2026” (for any market) that were prepared before early March are, ummm… not likely to age well! It seems that markets are only now (end of March) starting to understand that this mess is unlikely to have either a quick or a clean ending.
    // I’m not convinced that “looking through” this ongoing war as a mere blip is wise, but if nothing else, the timing for investing in Japan right now looks “courageous” (in Sir Humphrey’s terminology.) Even Buffet would wait for things to get cheaper!

  24. @RayMondElec on

    Thank you for video, really helpful.
    Would you consider doing a video for investing in ETF's for India please. I have been watching the BSE SENSEX since it was at 69500 but cannot find a suitable vanguard ETF.

  27. @101trails on

    Isn’t it ironic when stocks actually fall that suddenly the YouTubers start putting out content totally avoiding the fact that history shows to purchase during the dips – yet the videos start showing other things that can be done and other countries and totally ignore that the Nasdaq is actually at one of its entry points – yet none of these YouTubers are putting out context about that as it’s all about attention at that time.

  28. @nickreek3597 on

    Hi Ramin, you should do a video on Trading 212 new sipp offering. Its brand new with no platform or commission fees. Could shake up the pension scene if it rolls out well 👍

  29. @stevegeek on

    I’ve had a Japan tilt with 6% in HSBC Japan fund for the last 3 years and it has gone up ~40%…I’m happy with that. I’ve always admired the culture and work ethic.

  30. @101trails on

    As markets fall (and they could fall even more a year from now) it’s come to my attention again that the past 5 years YouTubers have said one thing – invest in etf’s – nobody can beat the market – you’re entitled if you do any different… and so on…

    What strikes me is they say “invest during the good times” “invest more during the bad times” – but read that again, because the last time I checked, the bad times are called the bad times because you’re damn unemployed or living in your car and things are bad for goodness sake, so there’s this huge part of the population who physically lose out during the bad times whilst the wealthier or those with connections are able to get money into the market during the bad times.

    The ones losing out are typically the people getting financial guidance from YouTubers who try sell you entry to courses or adverts from your time.

    If it’s the bad times then around 15% of the population are completely unable & frozen out of the option to buy gold whilst protecting their wealth and continuing to buy into equity funds and great stock opportunities.

    Yet each YouTuber states the same thing like a cult – Buy even during the bad times… well that’s not exactly possible so the only people who continue buying now from that point of view are the ones making the content and getting paid via ads and course subscriptions. It’s why these people are attracted to the business model as it currently works as a get rich quick scheme.

    Ramin states he is averse to get rich quick things yet he actually makes the actions of somebody who deep down is trying to get rich quick.

    I wouldn’t trust this guy (or any other social media finance person) even if he paid me to be in his course group. You couldn’t pay me £100 per quarter to even sign into his website, I don’t want to know what’s in there.

    I’m not being mean, I’m simply pointing out high level points that most of these viewers and subscribers are not going to be able to buy during the bad times. Most likely they will fomo buy at the peaks.

  32. @eweng903 on

    Thinking about boosting your Japan exposure? You can actually do that quite simply by opting for equal-weight global stock funds instead of traditional market-cap-weighted ones.

  33. @patq6523 on

    For your loyal Irish viewers and podcast listeners, could you please consider the €uro in your excellent videos (and of course podcasts….. can’t forget Michael)?
    Thank you for all the great work.

  34. @Bunjee77 on

    Ramin, I'm SURPRISED that you are promoting an actively managed fund with a 0.95% p/a ongoing charge. Do you invest in this fund yourself? Seems a little out of character, which is a shame because I love your videos.

  36. @iansimpson936 on

    Thanks Ramin. I have been investing in CCJI in my fun for a couple of years now and happy with its performance

    Standard active managed trust versa passive tracker debate.

    It’s a learning bet

  38. @theogulland on

    I've recently reduced my Japan exposure, due to potential issues, in the next X months, to do with oil and trade routes.

    Sadly, I think the area will be hit hard (my opinion obviously).

    That being said, i still have money a value OEIC, as Japan is so heavily integrated into 'boring advanced hardware', its safe to say the world would grind to a halt without them. Yes S korea is getting there, but not on the same level.

    Taiwan, is a complex story 😬

    Regardless, Japan is here to help with hardware others cant provide, and with gov backed stimulus, I think it still has legs, hence I still own funds, however, in the next 6 odd months I have a feeling there is going to be a bit of a ripple so to speak.

    Japan will always be a country I will watch closely, and I really hope they can weather the storm 💪👍

    I hope im wrong 🤞 🇬🇧🇯🇵