Japan Stocks and Funds Recommendation for Investment Growth Opportunity.

What’s not to like about Japan? After the World War Two, Japan and Germany have developed and turned their economies from military discipline to an industrial revolution. This all comes from their patriotic hard-working and ethical Citizen.

The millennial generations will always recognise Japan as reliable vehicle car makers, video game innovators, worldwide sushi and ramen takeover, entertaining Anime and the only place in the world with toilet seat warmers. Japanese people and culture clearly have their own personalities and identities.

If I could find a synonym for ‘Quality’ it would be ‘Made in Japan’.

I have visited Japan for three times in my lifetime and each time there is a nostalgic memory of my childhood. It just feels I have always been here before in my distant dream somewhere or deja vu. Everything in Japan is clean, precise and matriculate from their service to building architecture. My mate went for a haircut in a local hair saloon which cost £50, it was the best money he had ever spent. From the warm welcome, fantastic cup of tea, nice hot towel shave to the shampoo was after the haircut was at a Ferrari level.

I dropped by a popular optician (JINS) in Japan and the motto said ‘Glasses in 30 mins’ and no appointment required. I walked in had a look at a couple of nice frames I like. The optician then took a bow and welcome me to a seat and gave me a queue number. In less than 3 minutes I was greeted by the optician at the booth for my eye check. Ten minutes later I finished and was back at the waiting seats. Bam ten minutes later my glasses was ready?!?! How is that even possible? In the UK it took me 10 mins to the shop to make a reservation.

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Japanese tourism has boomed between 2014-2017, the number of tourists doubled each year due to open routes from China, South Asia and Europe. More and more people are coming to visit the beautiful land of the rising Sun. One key reason is the low yen. Japan’s economy has not grown much since pre-millennium (1999). After the crash, Japan was hit by the dot com bubble financial crisis. After seven years of recovery, it was the global financial meltdown triggered by USA banks which toppled the Japanese economy once again. Only after 2014, the economy has started to creep up. Japan’s interest rates are currently -0.1%. Which means no interest in the bank! You gather more profitable dust with money literally under your bed.

Between 2014-17 certain stocks/shares/funds have enjoyed sprouting growth. Japan’s neighbouring country South Korea and Hong Kong have boomed 250% and 150% respectively in the last 17 years. Personally, I think its time for Japan to turn it around and here are a few companies and recommendation to look out for.

  1. SMC Corporation

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A global specialist in manufacturing components such as air solenoids and pneumatic controls which feeds the modern automotive factory in China, Europe and US. The key customer is obviously China where its profit is being driven from. SMC is one of the few Japanese companies who has surpassed it’s DotCom Bubble financial crisis in the early 2000s. With the ever-growing world hungry for new devices and technology, I do not see SMS slowing down with its mature experience in this field.

2. Keyence

Another global manufacturing supplier but specialised more in instrumentation for measurement and sensors in the manufacturing line, automotive, pharmaceutical, biotech and food and beverages. Keyence products are found in almost every manufacturing plant in the world. Precision is their main subject and no companies can rival their products which they provide. From 2000-2017 this company have grown over 400%. Almost immune to the financial crisis and economic downturn.

3. Softbank

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My favourite stock of the three. Softbank seems to be buying up and investing in good quality companies. During my visit, I’ve always thought this company was just a simple phone provider. Until Softbank bought out ARM holdings from the UK in 2016, I started learning more about who Softbank actually is. Masayoshi Son is the CEO and driver of this fantastic company. His vision goes up to 30 years where he is in the AI race to ensure robotics, automation and technology advancement are in development via world private fundings to push down barriers and ensuring progress. He is also the first person to raise a $100 Billion fund from private investors. If you check on YouTube he has a video on how he raised $45B in 45 minutes.

Being in the UK, I find it difficult trying to buy shares from the Japan exchange market. There is an estimated fee of £50 pounds plus additional exchange rate commission to execute any order. My research went into fund and index to find the best deal and I found two.

 

A. JP Morgan Japan Fund – Class C Accumulation

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Keyence and Softbank stand more than 11% in Total. The fees are slightly higher than normal funds over 1.38%.

 

B. Capital Group Japan Equity Accumulation

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Another fund with a fairly expensive charge but contains very good quality companies from my top three favourites. A further favourite in the list is Asahi and Japan Tobacco which is very consumer non-cyclical orientated companies.

Both these funds are very manufacturing orientated which Japan excels compared to its neighbouring Korea and Taiwan. I hope this information helps to drive our portfolio growth.

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