Japan Small-Cap ETFs May Outperform if Rally Continues

May 8th at 10:45am by John Spence

WisdomTree Japan Hedged Equity (NYSEArca: DXJ) and iShares MSCI Japan (NYSEArca: EWJ) have gotten a lot of press this week with the Nikkei topping 14,000 for the first time since 2008.

However, investors can also look at small-cap ETFs for Japan to capture any additional upside.

ETFs in this category include WisdomTree Japan SmallCap Dividend Fund (NYSEArca: DFJ), SPDR Russell/Nomura Small Cap Japan ETF (NYSEArca: JSC) and iShares MSCI Japan Small Cap ETF (NYSEArca: SCJ).

DFJ is the largest in the group with assets of about $241 million. It charges an expense ratio of 0.58%.

JSC holds $96 million and levies fees of 0.55%, while SCJ is a $71 million fund with an expense ratio of 0.53%.

Investors can consider Japan small-cap ETF such as DFJ as an alternative with greater growth potential than large caps, according to consulting firm About Emerging Growth LLC.

“Over the long run, many studies have shown that small-cap stocks tend to outperform large-cap stocks during bullish economic cycles,” it said. “These same trends may come into play in Japan, where the economic recovery is even more pronounced.” [Japan ETFs Rocket as Nikkei Tops 14,000]

WisdomTree Japan SmallCap Dividend Fund

japan-small-cap-etf

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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