Mike S. Newton, CIM FCSIWisdom Tree Japan Hedged EquityDXJTOP PICKMay 01, 2013

Hedge against inflation. Under appreciated asset class. Japan presenting lots of opportunity. Extra returns against Yen weakness. Very good long term hold. Will continue to hold in portfolio. 

(A Top Pick Apr 03/23, Up 26%)

This is the hedged version (the Yen hedged to USD), a good thing. So, as the Yen declines, Japanese companies grow more attractive. He remains perplexed about investor apathy towards Japan.

Exposure to Japan with currency hedge on NYSE.
Higher yield and lower multiple than S&P option.
Good long term investment. 
Current valuation attractive for investors.

A hedge is always good. It means you are not taking currency risks. However, this is traded in US$. As a Canadian investor you still have US$ exposure. The hedge is between the US$ and the Japanese yen, not against the Cdn$. Chart shows it has had a pretty good run up, but there is resistance at around $60. The Japanese economy is not exactly firing on all cylinders. Japan is still suffering from deflation and very sluggish growth because of Asian demographics among other things. If you have some profits on this, make sure you take some.

A good ETF. Everybody can recite the bearish case of Japan, aging demographics as well as loads of debt. If you look at what has happened to Japan, imagine 30 years of an overvalued currency and chronic deflation. That makes the corporate sector extremely lean and extremely efficient. The turning point is that the ROE has been elevated for the last few years.

(A Top Pick May 13/15. Up 0.25%.) This is dealing with a quantitative easing in Japan that he thinks will provide some oomph to their economy over the next 12 months. It is equivalent to what the US did in QE 3. This is a significant program which he thinks will have a benefit. The problem you have is that the currency typically declines when the value of the assets go up, because you are printing more money. You want to hedge the currency out, but he didn’t want to hedge it to the Cdn$. He doesn’t like quantitative easing. Thinks we are kicking down the road the damage that was caused by the financial crisis.

(A Top Pick May 13/15. Up .04%.) Had thought 2015 would be a consolidation year in the markets and expects we will be in the malaise through to the end of the year. Also, thought the areas of the world, where they were doing a lot of stimulus, would probably play catch-up. Earnings are probably going to be pretty good in the 2^nd half of the year, but the problem is you are going to have a weaker currency.

This is simply institutional debts. They are taking the yen on a daily basis and converting it back into the US$ and hedging that whole entire situation out of it. The day that the tsunami and Japanese earthquake occurred, he took a position in this which turned out to be an incredibly good run for him, but then he got stopped out in 2013. Thinks there is a long ways to go here.

You are playing the liquidity infusion that is going on. It is Europe on steroids. It hedges out the Yen.

(A Top Pick May 1/13. Up 0.37%.) Got stopped out. Still thinks Japan is going to be an interesting 2^nd half story.

(A Top Pick May 1/13. Up 3.64%.) Tracks Japanese stocks and hedges out the yen. On April 1, they have a consumption tax coming in, which is going to be 8%. Once we get through this consumption tax, you could probably go back into this name.

(A Top Pick May 1/13. Up 0.99%.) Got out of this when it just wasn’t doing anything and he had a better idea. However, this correction becomes interesting to him. It is obviously a very scary situation but, on a secular basis, he still would want to own Japan in the near-term. There is definitely a trade on this one here.

What ETF would you suggest for investing in Japan? He would look at this one because of the hedging out of the fluctuations in the yen. The enormous amount of liquidity that is being infused into the US market is based on the fact that they are trying to lower the value of the yen.