Investing in FTSE 100 Stocks from Japan

[RTanakard]

Good evening members,

I am looking to invest in some FTSE 100 stocks, but am finding it quite difficult. I can't find any brokers in Japan that do it, and I'm worried about my residence and tax status for using a UK based companies. Any advice would be appreciated.

Thanks

[Kanto]

Tadah! Here are some index trackers.

UBS ETF 英国大型株100 (FTSE 100) (1389)
https://www.rakuten-sec.co.jp/web/marke ... ric=1389.T

UBS ETF 英国株 (MSCI英国) (1392)
https://www.rakuten-sec.co.jp/web/marke ... ric=1392.T

....

If you want single stocks you probably need to sign up for Interactive Brokers Japan (IBKR).

[bryanc]

this is interesting..thanks!! regarding the tax status -can you advise on this for jp residents??

[beanhead]

Performance of those FTSE funds seems much weaker than S&P / eMaxis Slim All-Country over the last few years. Brexit-related?

[fools_gold]

Performance of those FTSE funds seems much weaker than S&P / eMaxis Slim All-Country over the last few years. Brexit-related?

Yep. That and COVID, which has hit the UK really hard. Another thing is that the FTSE 100 has a higher concentration of dividend stocks (it pays out over 3% compared to around 1.5% for the S&P500). You need to compare total returns with dividends reinvested to get a proper picture of how it is performing. For example, the FTSE 100 was at around the same level in 2019 as it was in 1999, but with dividends reinvested you would have seen a 93% return.

[MisoSoup]

Performance of those FTSE funds seems much weaker than S&P / eMaxis Slim All-Country over the last few years. Brexit-related?

No. The US indexes have outperformed all other indexes around the world largely because of big tech. Major European indices like the French CAC 40 are still behind where they were 20 years ago in terms of performance.

[beanhead]

No. The US indexes have outperformed all other indexes around the world largely because of big tech. Major European indices like the French CAC 40 are still behind where they were 20 years ago in terms of performance.

Thanks. I thought the under-performance of FTSE compared to the S&P seemed more long-term than just COVID-19/Brexit.

Of course, no guarantee that this will continue in the future...but I have more confidence in the tech firms in the US than I do in a post-Brexit Britain, I am sad to say...

[MisoSoup]

No. The US indexes have outperformed all other indexes around the world largely because of big tech. Major European indices like the French CAC 40 are still behind where they were 20 years ago in terms of performance.

Thanks. I thought the under-performance of FTSE compared to the S&P seemed more long-term than just COVID-19/Brexit.

Of course, no guarantee that this will continue in the future...but I have more confidence in the tech firms in the US than I do in a post-Brexit Britain, I am sad to say...

The markets seem to disagree with your assessment. The FTSE isn't doing too bad these days. Also, the pound is the strongest major currency this year. If this trend continues buying into the FTSE (with yen) could have an added upside.

As you indicate big tech is likely to continue to drive the global economy. The only worry is that because of the massive gains of the past few years - US stocks have potentially more downside in a stock market crash.

[mule96]

The markets seem to disagree with your assessment. The FTSE isn't doing too bad these days. Also, the pound is the strongest major currency this year. If this trend continues buying into the FTSE (with yen) could have an added upside.

On the other hand it is on par with other european markets, and the gbp is on a several year long downtrend and there are analysts who say that there is no long term reversal in sight. I would be very careful with such prognoses. I think like the general investment strategy that is recommended here, it is more important to focus on the long term aspect of reguarly investing in a global or country fund, and less hoping for currecy gains or current market strength.

[MisoSoup]

the gbp is on a several year long downtrend and there are analysts who say that there is no long term reversal in sight.

I couldn't find any analysts with that viewpoint. Bloomberg's view below seems to be shared by everyone else.

"There is convincing technical evidence that the British pound is showing a lot of long-term strength – in fact, when a currency is gaining over the long-term against all the majors, it is likely to be the strongest major currency, and that is the case with the British pound today".

I think like the general investment strategy that is recommended here, it is more important to focus on the long term aspect of reguarly investing in a global or country fund, and less hoping for currecy gains or current market strength

'Global funds' are predominately US stocks based i.e. US dollar based. So, if the dollar crashes the 'global funds' will be hammered. It makes perfect sense for a UK citizen having part of his / her investments in the GBP. If someone is paid in yen they should also have a percentage of their investments in the Japanese yen. Being overweight on funds which are predominately dollar based investments is a currency risk if you are a non-American paid in yen.