Abe has stated that health care is an important sector to contribute to Japan’s economic growth and that he wants to use it as part of his growth strategy. As technology companies should also receive a boost from new government initiatives supporting additional capital spending, we believe tech, media and telecom stocks are also poised to be beneficiaries of Abenomics growth strategies.
The capital goods sector, which we broadly define to include automobile companies and related suppliers, typically includes the most export-oriented stocks. These stocks are often most sensitive to changing exchange rates—so if the yen continues its slide, these stocks could benefit.
I believe 2013 marked the start of a multi-year bull market in equities, and I think there is investor demand for more specific executions on the Japan trade. With these new sector Indexes, WisdomTree has expanded the Abenomics tool kit from broad-based exposures—such as the ones represented in the WisdomTree Japan Hedged Equity Index—to more specific Japanese investment themes: reflation, Abe’s growth strategy and yen sensitivity.
1Includes the MSCI Japan Index, MSCI Japan Local Currency Index, WisdomTree Japan Hedged Equity Index, MSCI Japan Small Cap Index and WisdomTree Japan SmallCap Dividend Index for period 12/31/2012 to 12/31/2013.
Important Risks Related to this Article
Investments focused in Japan are increasing the impact of events and developments associated with the region, which can adversely affect performance.