Why Japanese Equities Are The Lone TINA Trade

The days of There Is No Alternative trades, commonly referred to as TINA trades, have come to an end for the U.S. and many other countries as bond yields rise and property prices skyrocket.

The collapse of the TINA trade that favors equities over underperforming bond yields and illiquid real estate and often is its own driver of equity performance has advisors looking further afield for opportunities beyond equities, particularly given rising property rates as the Federal Reserve continues to hike interest rates.

Image source: Jeff Wenigers Twitter

With the U.S. two-year Treasury currently at 4.278% as of midday trading on Monday, Canadas two-year government bond at 3.842%, and other countries seeing similarly high government bond yields, Japan stands out at -0.049%.

I talk to advisors for a living. I'm telling you, many American advisors have zero in Japanese stocks. The third largest stock market in the world...and they have zero, tweeted Jeff Weniger, CFA and head of equity strategy at WisdomTree. 700-800 bps earnings yield minus any Japanese bond and yet they wont touch it.