It will be interesting to see how much of the hot money that has flooded into Japanese ETFs will run for cover after the Nikkei’s stunning 1,000-point drawdown Thursday.
WisdomTree Japan Hedged Equity (NYSEArca: DXJ) and iShares MSCI Japan (NYSEArca: EWJ) were down about 8% in early U.S. trading.
They are the two best-selling ETFs in 2013 by a wide margin, collecting over $13 billion combined so far this year. [Bulls Stampede Into Japan ETFs]
DXJ, the WisdomTree fund, hedges its currency exposure. The fund has been popular with investors who want to invest in Japan while mitigating the impact of a weaker yen as the Bank of Japan takes unprecedented steps to stoke inflation.