Stockchase Opinions

Nadine Terman on Fast Money iShares Japan ETF EWJ-N BUY Sep 03, 2021

Japan is rallying after their PM resigns This is an easy way to take advantage of this rally in Japan and benefits from currency movements. In Japan, industrial, services, real estate and financials are hot sectors that'll benefit from government stimulus. Today's Japanese rally--sparked by their PM's resignation--is a huge deal.
$71.525

Stock price when the opinion was issued

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WEAK BUY
Allan Tong’s Discover Picks A reliable and efficient way to get a piece of Japan’s rally is this tried-and-true ETF that trades in New York. EWJ stock carries US$11.59 billion in assets, trades at only a 5.32x PE and charges an 0.51% MER. Last Friday, it jumped 2.84% to a new high of $71.82 and changed hands at nearly three times its normal volumes. EWJ holds (in order of size) Toyota, Sony, Keyence and SoftBank with Nintendo down the list. EWJ tracks the MSCI Japan index. Read 3 Recovering Stocks to Consider for our full analysis.
HOLD

Covers largest cap Japanese stocks.
Good for Japan equity exposure.
If bullish Japan - good product.
EFJA - better option for Canadian investors. 

BUY

Great option for Japan oriented investors.
Low valuations presenting buying opportunities. 
Lower risk with under valued assets.
DXJ (hedged equity fund) also a good option. 

BUY

The Yen will remain suppressed while valuations won't be as demanding in Japan as in parts of the US market.

TOP PICK

Japan is coming out of a long bear market and has performed consistently over the past year along with the yen stabilizing. Warren Buffet has been buying over the past year. There are lots of industrial, including electronics companies, as well as financials in its holdings. It is a good way of diversifying your portfolio.

PAST TOP PICK
(A Top Pick Jan 29/24, Up 6%)

Underappreciated market. Very large financial and industrial sectors, which didn't do well for a decade but are now leading. Diversification. Earnings growth higher in Japan than in US, but trades at 16x vs. 21x. Early days of movement for international stocks in general.

BUY
ETFs for Asia.

Not sure if you can be in Asia without being in China. A lot of names have the growth coming from China or Hong Kong. AIA is a good name, with 50 of the largest names in that region, including China (34%) and Taiwan (31%).

For Japan, EWJ is one to use.

When investing in Asia, he just goes with the large caps and doesn't use any of the mid-cap names.

DON'T BUY

For high-net-worth investors especially, consider getting a Canadian-domiciled ETF. Yes, US listings are very liquid and some are cheaper, but you might be exposing yourself to US estate taxes. He's not a tax expert. 

Legacy pricing and history. Franklin Templeton disrupted the single-country category by tracking the FTSE indices, which are actually more diversified because they hold mid- and small-caps. Its Japan offering, LJA, is significantly cheaper at just 10 bps.

PAST TOP PICK
(A Top Pick Jan 29/24, Up 7%)

(Note short timeframe.) After the August yen reversal, people were scared but this went right back to highs immediately. Warren Buffett's biggest purchasing is going on in Japan right now.

PAST TOP PICK
(A Top Pick Jan 29/24, Up 5%)

Currency has been the headwind here. Will do well over the cycle. Buffett's been a big buyer of Japanese equities over the last few years. Very compelling valuations on Japanese industrials and financials.