Too late to play Japan Funds???

catch22

Some Japanese funds have had a decent run since June of 2012 (+9-30%) with much of the strength coming since the November period with the entry of a new government who is planning to shake the boat of Japan with new monetary policy. YTD returns vary from +.4 - +5.7%.
A formal announcement will arrive tomorrow of policy changes, if any pan out at this time; with a major part of the plan in killing down the value of the Yen to boost exports.
Now, the big kids/money houses are already having fun with this investment sector, too; not unlike other areas. 'Course these same kids could blow an investment right out of the water, too.
Just curious as to whether anyone has some money already in this area; or thinking about same.

Thank you for your thoughts.
Regards,
Catch

AndyJ

Hey Catch, don't know of course, but it's possible the whole fleet might have already sailed on this one on expectations, and if they don't pan out as rosily as they might, the upside from here might not amount to much.

One possible way to go would be to skip the pure exposure and grab some shares of one of the diversified Matthews funds with significant holdings in Japan -- like MAPIX or MPACX -- and then you'd also be getting some extra exposure at the same time to the other potential-upside story out there ... China ... as well as a fund for just about all seasons if you decide to keep it.

FWIW, I'm likely this week to add a small position in MPACX to the part of the stable dedicated to the Matthews thoroughbreds. (Cue the cleaning-out-the-stables jokes.)

catch22

AndyJ,
Thanks. I will watch Tuesday to find what the big kids are doing and how much they slap the Japanese market up or down. Nikkei was down 1.65% for their Monday close and their market will open in several hours to find how things start for their Tuesday.

hank

Not for short term investors - could do anything over next few years. I've dabbled before but am getting too old for this one - so don't own. (1) The new PM is hell-bent on getting inflation up to 2% a year within next couple years. He has the popular backing to basically run-over their conservative central bank - so will probably get his way. Some economists think this may be enough to rekindle the economy after 20+ years of deflation - essentially a permanent state of depression.

(2) A second "loose ball" here is the growing dispute with ancient enemy China over a group of small uninhabited islands (in a chain which includeTiawan). Recently both scrambled fighter jets to the area, but calmer heads prevailed - for the day anyhow. Interestingly, the islands offer a vantage point of China's nuclear subs departing the mainland for long missions. As such, China has a keen strategic interest in taking control. Looks like this situation may rekindle Japaneese nationalism and militarism. Now, how would a big military buildup affect Japan's economy? My guess is it would be good for it - short term anyway. Catch, if you invested in Japan it would be a far cry from your old conservative fund boat mantra. Plays on specific foreign nations or regions are inherently more risky than more diversified funds. Take care.

scott

I think what Japan is doing is short-term positive (for use of a better term), but mid and long-term negative. I don't think the Japan play is over, but I would play it as more of a side bet than a major investment. I do own a small but fairly aggressive play on Japan.

catch22

Hi hank,

You noted: Catch, if you invested in Japan it would be a far cry from your old conservative fund boat mantra. Plays on specific foreign nations or regions are inherently more risky than more diversified funds.

Yes. Probably just the damn cold weather here; and already gett'in the itch for spring that is affecting my cranial cells.
Never have enjoyed when it is so cold that the snow squeaks when walked upon.

Thanks, hank.

hank

Catch: just sorta hid that remark at the end - to see if you read the whole thing -:)

rono

Hi Mark,

This might be a repostie or the throttle monster is eating mine.

I concur with Andy. Get a nice pan-asian including Japan fund and call it good. Japan and China are the current lead dogs, but India had a good year. feh. It's a multilateral regional trade thing and you just want to play the synergy. Don't try to pick and choose.

Take care,

peace,

rono

catch22

Hi rono,

How 'ur a keep'in warm this frosty MI morning. Chill factor about -20 this early morning here.

Are we (I/me) getting too old to go play with these little sectors?
Just mess'in with you.

Ya, there are enough blender funds out there for just about anything one could desire, eh?

I still get the itch (for narrow sectors), within reason; as our house used to play among the Fido selects. 'Course, there are still some very good choices among these, too.

On the other hand, the bell sometimes rings loud for a "lazy type" portfolio to monitor, leave alone for the most part; and attempt to watch for the crazies and big market moves to protect the downside. Heck, even the 529 we have cruises along with a most unimpressive blend of 50/50, VITPX and VBMPX.

Thank you and take care of yourselves over there,
Catch/Mark II

scott

Reply to @catch22: I'm not in retirement age, and I don't particularly like playing specific things like what's going on in Japan, but I think that 1:) what's going on in Japan is going to play out over a longer period (more than something that just plays out over a quarter or 6 mo) and 2:) there will probably be opportunities to get in lower.

If I was at/near retirement, I'd just be in P & G, J & J and the like around the world - boring, provides a nice yield and largely don't require looking after.

Vanguard's Consumer Staples etf (VDC) offers a 2.95% yield and lost only 16.95% in 2008.

catch22

Morn'in scott,
I agree as to the time frame you noted; and have looked at DXJ in particular.
DXJ is down -2.4%, pre-market.

What are you holding that is Japanese exposure, if you choose to reveal?

Digging through my message alerts finds this from overnight:
NY Times BOJ Policy
Regards,
Catch

hank

Reply to @catch22: Not Rono - But ... What ya doing there Catch? Sittin in the beer cooler? Yeah - cold up north too. Gotta get out & run the walk-behind. With the wind, we might find our self burried in a drift at day's end. ... FWIW was just thinking about Rono's "race to debase." With Japan opening the flood gates, it also opens the doors for other central banks around the world to follow suit. 2% inflation target by 2014 (after years of deflation)? Yikes, even Bernanke would find that a huge undertaking. From AIW: "First the verdict. Than the trial." We know what's coming. Now let's count the ways.

scott

Reply to @catch22: Let me say this and this is my view and I may be wrong: if one desired playing Japan printing money and the effect of it, I would not play it via an actively managed mutual fund, but would instead play it via a broader ETF. Maybe I'm wrong, but I don't want a manager picking quality; I think what hasn't fared well in Japan may benefit most from what's going on. As Hank noted, Japan's actions won't go without a response from other countries.

catch22

Reply to @scott:
There are numerous etf's playing in Japan.
The only one on my list remains DXJ, as previously noted.
We have ready access to, two Japan funds via Fido; but the etf holds more allure; or perhaps more potential is a better word. 'Course potential in which direction is the main question, eh?
Heck, I'm still trying to figure whether the equity markets are as valuable as they were 5 years ago. Not so sure about that; but with all of the central bank money being moved about; one may suppose just about anything has a price.........real or not.
Thanks,
Catch

AndyJ

Reply to @catch22: From what reading I've managed to do on the subject, the key element is owning Japanese mega-cap "global brand" exporter stocks, which will make the most hay with devaluation of the yen. DXJ (WT Japan Hedged Equity) does that pretty well, with a side dish of currency hedging, so the conventional wisdom in the finance world seems to be that it's the purest play on the assumed (!) direction of things with the new government.

Seeing as how it's getting slaughtered today (ha! the etf, not the new gub'mint), there might be a cheaper price on it in coming days, if that's how you want to go.

rono

Howdy folks,

I've been a fan of the House of Matthews for going on 20 years. I still feel they're the best way to play Asia. They've got very conservative pan-Asian funds that include Japan MAINX Strategic Income, MACSX Growth & Income (bought some in wifeys Roth several months back.). MAPIX is Asian Dividend and for higher risk, MPACX Asian Growth or MATFX Asian Tech. All of these funds cover all of Asia so you get Japan and China, but also Korea, Indonesia, etc. You're playing the pacific basin and it looks like a good long term play.

peace,

rono

Old_Joe

Hi rono- FWIW, I'm using MAPIX for the same reasons that you list.

Take care-

MikeM

FWIW: there is MIJFX or PRJPX. Like the others, I wouldn't go country specific either.

AndyJ

Here's a relevant piece from the Barron's "funds" blog:

http://blogs.barrons.com/focusonfunds/2013/01/23/japan-bulls-stumble-but-investors-still-betting-on-yen-tumble/

Appears investors have already upped DXJ AUM by ~ 60% since the first of the year.

catch22

Hi AndyJ,
Yes, lots of cash flow since about mid-November, 2012. DXJ is in sell mode again today; but there may be another entry point in the future. Which was the intention of the original post for those so motivated in this area.
And, BOJ placed the "plan" on hold until 2014; for the most part. So, the selling is in place at this time.

Take care,
Catch