He says that independent, disciplined research into this area of the market can result in high conviction, non-consensus views on individual stocks and this can add more value to investors than remaining entrenched in the large-cap arena.
Diversify
For advisers such as Ben Willis, head of research at Whitechurch Financial Consultants, the decision to go little or large when it comes to Japanese equities really depends on investors' attitude to risk and their financial objectives.
He comments: "Japan is largely an export market and so blue-chips will comprise mainly exporters and financials. These companies offer core exposure to Japanese markets.
"But for clients seeking higher growth potential and who buy into the long-term structural reform theme, then exposure to domestically focused mid and small-caps could be preferable.
"That said, the Japanese equity market has behaved as a barometer for risk in recent years, so the mid and small-cap stocks can be very volatile."
Katsunori Kitakura, strategist at SuMi Trust, says: "In our view, the key to uncovering investment opportunities in the Japanese market is to focus on what is changing at a company level.
"While the market, the economy and (prime minister of Japan) Shinzo Abe's reform policies look to have been treading water over the shorter-term, we believe the long-term positive transition within the corporate sector has only really just begun and will remain on track."
Being style-neutral is Fidelity's Nick Peters' way to play Japan. The multi-asset portfolio manager for Fidelity International explains: "The market has had a volatile year in terms of which style has performed well from month to month. It makes sense generally to try to have a broadly style neutral equity exposure."
