Contrarians' Day: It's Time to Consider Japan

Japan's Nikkei 225, once approaching 40,000, climbed above 9,000 this month for the first time since December 2002. "The Japanese market still looks depressed, but there are real signs of corporate restructuring," said Ernie Chow, a research officer for Barclays Global Investors. "And there are still some world-class companies in Japan, such as Honda(HMC Quote) and Nintendo(NTDOY Quote)."

However, Chow and others counsel that Japan may not be a quick success story. Eveillard said his firm is finding a substantial number of companies trading with net cash in excess of market capitalization -- "you are buying them for less than nothing," he said. However, "you have to have time to be invested in Japan."

Also, investors looking to take a chance on Japan would be well served keeping a Japan fund to about 5% of a diversified portfolio. A few quick thoughts when considering the following fund choices: Past results are going to be lousy. But investors shouldn't consider Japan as a way to get in on a hot trend anyway.

Also, each fund represents a different way to play Japan: a concentrated fund that bets on big and small companies; a bigger-cap, growth-oriented fund; a small-cap fund; and an index fund. They share common strengths: Good managers, good firms behind them, no sales fees and relatively low expense ratios. It's up to investors to decide which one -- if any -- is right for them.

1. Matthews Japan

When looking to invest in Asia, the Matthews Asian Funds family is a great place to start. G. Paul Matthews founded the firm in 1991 on the belief that Asia would be the dominant growth region of the coming century. And while Matthews & Co. remain underwhelmed by Japan's efforts to right itself, the firm's (MJFOX Quote)Matthews Japan fund (ticker: MJFOX) has managed to navigate the bumpy terrain better than its peers.