Looking at your setup, since you’re holding VT and AVNM, you actually already have roughly 5-6% exposure to Japan just by default. If you add a dedicated Index, you’re making a deliberate tilt to overweight it.
To simply answer your question, no. No idea for an Index, we’ve talked a bit regarding Japanese equities on the stockpickers thread. The Nikkei 225 has done very well this past few years, it’s Japan’s SP500, you can simply go with it to get Japanese blue chip exposure.
If you want to dig deeper into the current Japanese market, I see three main plays:
- AI/Tech
- Crazy up on the tech sector, you have a toilet company being the most undervalued/overvalued AI stock.
- A lot of everyday Japanese companies have deep integrations on the AI supply chain. Ceramics, Photonics, Fiber Cables, etc.
- Cyclicals
- Surge on materials with the trading companies holding everything from rare earth minerals, chemicals, oil & LNG to food supply chains.
- They own the infrastructure and manufacture everything you can think of. If you take Mitsubishi for example, they make pencils, AC units, cars, rockets, forge gold and a lot more. Almost all the big 5 also have Banks that are very active inside and outside Japan.
- Deep Value small caps
- Boring businesses
- Profitable for 20+ years
- Pays dividends
- Below book value
- High insider ownership
So, choose your poison. Be careful that Japan remained flat for 30 years, and it’s only waking up now. If you want to enter the trade, you need to understand that if you’re not going for deep value, this is purely a momentum play and you need an exit strategy. No matter if you pick an index or individual stocks.
The other factor to watch out for is the FX market. CHFJPY is at ATM. I have no idea when the BOJ and/or SNB might intervene to not let the CHF appreciate further.