The ‘unloved’ stocks trading at bargain prices that could make YOU rich – turning £12.50-a-week into £12k

WANT to get rich from investing? The secret is to find underrated, ‘unloved’ investments which you can snap up for a super cheap price now, and then see steadily rise in value. These are opportunities that have been overlooked by investors, so are still trading at bargain prices while quietly making decent returns. Here we reveal the ‘unloved’ funds market whizzes have got their eyes on right now – and one could turn £12.50-a-week into over £12k. Investing in ‘unloved’ stocks could help you grow your cash for the future Credit: MicroStockHub Shares in Japanese companies such as Sony could be worth looking into, according to experts Credit: Getty The reason unloved stocks are worth looking into is that they could help you achieve the golden rule of investing, which is: buy low, sell high. If you buy a stock (when you own a small slice of one company) or a fund (which invests in lots of different companies and other types of assets) for a low price, it could increase in value and you can then sell at a high price – making a tasty profit. Experts say the Japanese stock market is full of overlooked investments selling for a good price and delivering steady returns. Jason Hollands, managing director at Bestinvest by Evelyn Partners, says: “It’s sometimes dismissed because of Japan’s ageing and shrinking population, together with the long-standing perception that many of its large companies have historically hoarded cash rather than prioritised shareholder returns.” Experts like Jason say it’s a good time to invest in Japanese stocks, or funds which invest in Japanese companies. That’s because the currency has fallen to a 40-year low, and is now around 200 yen to the pound – down roughly 30% from around 140 yen per £1 a few years ago. So why is a weak yen good news for investors? Dan Coatsworth, head of markets at AJ Bell, says company stocks actually tend to perform well when a country’s currency is weak. “A weak yen is good for Japanese companies that generate revenue overseas, such as Toyota, Sony and Nintendo,” he says. “These overseas earnings look bigger in yen terms and currency weakness can drive up earnings forecasts and boost share prices.” Plus, it means you can buy shares in Japanese companies for less as well. If you’re a beginner investor, it’s usually better to start investing in funds. This is because if you invest in a fund, you are spreading your risk across lots of different investments – not just one. Plus, analysis by Finder has revealed that popular investment funds have typically generated bigger returns over the last 10 years compared with individual Japanese companies. Here’s three funds investing in Japanese companies that experts have got their eyes on… What are the risks? BEFORE you start investing, you need to understand the risks. The return you make will depend on how much you invest and where. You must be prepared to lose all your money – so only invest what you can afford to sacrifice. You need to be willing to invest cash for at least five years to mitigate any dips and allow your money to recover. If you can’t afford to lock up your money for this long, investing may not be right for you. It’s usually better to drip feed money into your investments instead of putting down a big chunk of money in one go. Before you start investing, experts say you should have a minimum of six months’ of wages in a savings account before you start and only invest money you can afford to lose. 1. M&G Japan Fund Toyota is one of the major Japanese companies that could be worth keeping an eye on Credit: Getty M&G Japan Fund is a popular choice. At least 80% of the assets (another word for types of investments) it invests in are Japanese companies. The types of companies it invests in are Toyota, Mitsubishi, SoftBank (which invests in telecoms and tech companies) and Sony. Dan says the M&G Japan Fund has a good track record of beating the Japanese stock market as it picks companies it believes are undervalued – in other words, it invests in lots of unloved stocks. Bestinvest also suggests the M&G Japan Fund as one of its top fund picks for Japan, citing its 104% returns over the past five years. If you had invested £50 a month – which works out at £12.50 a week, the price of a few coffees out or lunch meal deals – over the past 10 years, you could have a whopping £12,391 now, according to Finder. That’s a huge increase of £6,391 in investment growth. 2. Fidelity Index Japan Sony, which makes PlayStation, is usually included in the top Japanese funds Credit: Getty You could also try the Fidelity Index Japan, which invests in around 200 Japanese companies. Like the M&G Japan Fund, it invests in Toyota, Sony and Mitsubishi. It also invests in Hitachi. It’s a tracker fund, which means it copies a specific market index – in this case, the MSCI Japan Index (which tracks large and mid-sized Japanese companies). Tracker funds are run using computer algorithms rather than by stock picking teams, so they’re often cheaper to buy. So one big draw for investing in this fund is that fees are low at 0.1% a year. Low fees are good, because you can keep more of the money you’ve made from your investments. Dan says the Fidelity Index Japan fund is worth a look because it provides “big exposure to industrial, tech and financial companies”. This means you’ll get a well-rounded mix of growth opportunities. Tech firms will be profiting from the AI chip and gaming boom, while industrial companies will have strong exports as they’re able to offer competitive prices while the yen is low. If you’d invested £50 a month for the last 10 years, you would now have £10,624 – an increase of £4,624. 3. iShares Japan Equity Index (UK) The iShares Japan Equity Index (UK) fund includes shares in carmaker Mitsubishi Credit: Alamy You could also go for the iShares Japan Equity Index (UK) as a cheap alternative with low fees. Like the Fidelity Index Japan fund, it’s a tracker fund. However it tracks the FTSE Japan Index instead, which includes hundreds of large and medium-sized Japanese companies. These include major firms like Toyota, Sony and Mitsubishi. The fees are the lowest among the three funds we’ve picked out here, at around 0.08%. Jason says this fund is ideal for “investors looking to keep costs down”, but it still has a decent return. It has delivered a 64% return over the past five years. If you’d invested £50 a month over the last 10 years, you would now have £10,750 – an increase of £4,750. Just be careful when you sell your investments – keep an eye on exchange rates. It’s generally a bad time to sell your investments and convert any profit you make back into pounds if the pound is UP against the yen, and the yen is weak. Want to invest in stocks? Four companies to look into - and the risks to consider IF you want to invest in stocks instead of funds, top experts have picked four to watch. Beware – this should be something that only those comfortable with investing should look into. That’s because you are essentially putting your eggs in one basket, so you need to be prepared to lose all your money in the event that the company you are investing in flops. Plus, the returns on these stocks are not as impressive as what you could have made investing in certain funds. But remember – a stock’s historical performance doesn’t guarantee you will make the same amount of cash in the future. Ben Kumar, head of strategy for wealth, public policy and investment at 7IM, said you could also consider one of Japan’s car makers like Toyota. He said the company is “certainly cheap” now and has “the supply chain advantages to keep a healthy share of the Western market”. £10 a month could have turned into £1,454. This isn’t a huge increase on your investment of £1,200, but future returns could potentially be better. Kazunori Ito, director of equity research at Morningstar, also recommends Sony as a bargain stock right now. Buying shares in Sony effectively gives you double the profit for your money versus US companies like Microsoft or Apple. Kazunori recommended Sony because he believes the market is overstating the threat to gaming companies from AI. £10 a month over the last 10 years could have turned into £2,058. Mr Kumar says the manufacturing sector is another “big opportunity” because the world is investing in defence, energy grids and data centre infrastructure. “Companies like Tokyo Electron are vital parts of the semiconductor supply chain, while others like Mitsubishi Heavy Industries are involved in everything from nuclear power to aerospace defence systems,” he said. If you had invested £10 a month in Toyko Electron over 10 years, you could have £5,400 now. That’s a pretty decent return of £4,200 on your investment. If you had invested £10 a month in Mitsubishi Heavy Industries, you could have £4,100. That’s a return of £2,900.