After a strong performance in 2003, 2004 and 2005, the Japanese stock market was essentially flat during 2006 until a strong December rally brought the most widely traded Japan ETF (EWJ) up just over 5% for the year.
What lies ahead for Japan as the worlds second largest economy and stock market? Will the Japanese yen finally begin to appreciate and benefit foreign investors? Is Japan still an excellent play on the overall Asian growth story? When will the Japanese consumer begin spending again? Why is Japan one of the few countries in the world to have a trade surplus with China and why is Japan able to hold on to its industrial base so much better than America? Are Japanese large multinationals the place to invest or should investors target the smaller and more innovative companies?
In 2006, small and mid cap ETFs led the way in Japan and these ETFs could also do well in 2007. The best performing ETFs tracking Japanese markets were WisdomTrees Japan Small Cap ETF (DFJ) and its Japan High-Yielding Equity ETF (DNL). Both ETFs were introduced on June 16th. Other key questions for long-term ETF investors are how will the Japanese - America alliance evolve and could Japan be moving towards excessive nationalism? What is likely to be the impact of Japans demographics on investment opportunities and returns?
These are all important questions. Why dont you get to the bottom of these questions yourself by joining me in May 2007 as I lead a ten day investment tour of Japan http://japaninvestortour.wordpress.com/about/
This will be a trip of a lifetime and will be a fascinating immersion into Japans stock market, economics, politics, culture and history as well as provide you with the opportunity to learn more about specific Japanese companies. Join me to find out what place Japan should have in your global ETF portfolio.
Carl T. Delfeld President & Publisher Chartwell Partners http://www.chartwellETFadvisor.com
Carl has over twenty years of experience in the global investment business with a strong background in Asia.
Author of global investor primer "The New Global Investor"
President of the global investment advisory firm Chartwell Partners
Publisher of the Chartwell Advisor ETF Report and Asia-Pacific Growth
Columnist on global investing with Forbes Asia: "Global Gambits"
Former U.S. Representative to the Executive Board of Asian Development Bank
Chairman of the global economic strategy think tank ChartwellAmerica
Asian specialist with the U.S. Joint Economic Committee and the U.S. Treasury
Former member of the U.S. Asia Pacific Economic Cooperation Committee
Former investment executive with Robert Baird & Company and UBS
Graduate of the Fletcher School of Law & Diplomacy with economics scholarship from U.S.-Japan Friendship Commission