ETFs Resources and Information

Japan ETFs are hot once again

Interest in Japan ETFs is on the rise following shake-ups in the country's leadership.

Interest in Japan ETFs is on the rise following shake-ups in the country’s leadership.

Since the reinstatement of Japanese Prime Minister Shinzo Abe, investors have been increasingly interested in Japan's markets, as many are hopeful that his second tenure in office will mark an end to a long period of steady disappointment regarding the nation's economic outlook.

"The Japanese economy has witnessed a number of changes in terms of leadership as well as policy enactments over the past few months," wrote in a March 22 piece. "The newly elected Prime Minister seems determined to boost the Japanese economy by proactive measures such as an open-ended monetary easing program."

Due in part to these developments, on April 12, the iShares MSCI Japan Index Fund (EWJ) was the single most traded stock for the day, according to Index Universe, a leading online authority on ETFs and index funds. This activity was also likely spurred by the fund's performance, as it was among the 10 best-performing ETFs in April, the source noted.

In total, the ETF has a net asset value of 2.63 percent, and led all other related equities on April 11 in terms of asset gathering, adding more than $352 million in a single day. This development helped the EWJ reach a total of $8.4 billion, the report stated. Since January 1, the fund has attracted more than one-quarter of its investment dollars, and similar growth has been seen in the dx X-trackers MSCI Japan Hedge Eq ETF (DBJP)

But while many investors are allocating funds to these ETFs because of the potential reward, there is still risk involved. As such, they can benefit from relying on stock portfolio management tools to help them form adaptive exit strategies for these equities. At SmartStops, we take the pressure out of your buy, sell or hold decisions. 

While investors are increasingly allocating funds to this ETF and the Japanese market as a whole, risks remain high as aggressive and as yet unproven monitory policy continues to be applied.  In this environment, having a risk monitoring and management process in place such as the service provided by is prudent and can help investors gain the upside exposure desired while reducing the associated risk.

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