![]() economy facing all sorts of challenges, ETFs like DXJ may be worth watching as we enter the second quarter of the year.įor more news, information, and analysis, visit the Modern Alpha Channel. While past performance doesn’t guarantee future returns, Japan’s exposure to China’s ongoing reopening and its steady-as-she-goes economic policy present currency-hedged Japan ETFs as an intriguing play. DXJ has outperformed HEWJ and the Xtrackers MSCI Japan Hedged Equity ETF (DBJP) on a YTD basis, charging 48 basis points (bps) to track the WisdomTree Japan Hedged Equity UCITS Index, compared to 50 bps for HEWJ. dollar, DXJ, for example, offers a pure-play approach to the performance of Japanese stocks. But it’s the currency factor that helps set the DXJs and HEWJs of the world apart from, say, a non-currency hedged strategy like the iShares MSCI Japan ETF (EWJ).īy hedging out the impact of the yen, and how it changes compared to the U.S. That presents an appealing equity opportunity, especially as factors like earnings, reopening demand for Japanese imports in China, and even wages boost the overall picture in Japan. ![]() See more: “ The Asia Equities ETF Offering Intriguing Tech Indicators” has been stubbornly unwilling to slow down despite the Fed’s best efforts. The company’s 50 day simple moving average is 57.22 and its 200 day simple moving average is 54.31. While Japan’s inflation rate is one of the lowest among all major nations, inflation in the U.S. iShares MSCI Japan ETF Price Performance NYSEARCA EWJ opened at 57.49 on Wednesday. market is right now, and it’s a big differentiator: inflation. For one thing, advisors may ask themselves what the big challenge for the U.S. ![]() Why the spike in interest for currency-hedged Japan ETFs? Well, there could be a few reasons. That may actually be a more impressive jump despite the smaller percentage, given that DXJ already sees much more research interest and advisor engagement as a common proxy for currency-hedged Japanese equity exposures among ETFs. DXJ, too, saw a big spike at 38% in research volume. HEWJ has seen an 868% increase to advisor engagement on a month-over-month (MoM) basis, up there among bank strategies like the SPDR S&P Bank ETF (KBE) and the iShares U.S. While bank ETF engagement spikes might make sense, currency-hedged Japanese equities are somewhat of a surprise in terms of the most popular ETFs for advisors, with the iShares Currency Hedged MSCI Japan ETF (HEWJ) and the WisdomTree Japan Hedged Equity Fund (DXJ) benefitting. Market signals come in all shapes and sizes, but at VettaFi, advisor engagement is a leading indicator - and right now, that data is putting the spotlight on currency-hedged Japan ETFs.
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