It's hard to find an international index fund that has all the countries we want to invest in and not the countries we don't want to invest in. International investing in one fund is fraught with countries that could be in economic downturns or recessions or countries that have command-and-control economies that we'd like to do our best to avoid.
An international fund can invest in the solid markets of developed countries, or it might invest in emerging markets or frontier markets which are less mature and carry more risk. Just because a fund is called "international," doesn't mean we want to include it in a portfolio. We'd like to get more specific.
One idea is #EWJ, the iShares Japan ETF. This fund gives us access to around 300 of the best mid to large-size companies in Japan in a single trade. The top holding is Toyota at around 4% of the fund, followed by SoftBank, Sony, Mitsubishi and Nintendo. The sector breakdown is what we like the most:
18% Consumer discretionary
This is a global recovery pure play. As the pandemic gets further behind us, industrials and consumers will likely rebound and rebound big. Getting back to life as normal means getting back to growth as normal and Japan could take off.
Here's a look at the technical picture. #EWJ is sitting right at support of a broadening wedge. As this base of support builds, and price goes above the moving average lines (pink and orange) the stage is set for a run higher. If price fails at the moving average lines, which is possible, then we might have a break of support and go lower. Value investor Ben Graham would likely see this trade as having a high margin of safety so it's definitely worth considering. #EWJ is on the #IndexPRO watchlist.