Using ETFs To Hedge Against Japan's Short-Term Volatility | ETF Trends

In the early stages of Japan’s calamity, market volatility could drag performance from Japanese assets. Investors can hedge their exposure to Japan’s markets with Japan -related exchange traded funds (ETFs) that implement short strategies.

Simply put, inverse, or short ETF, strategies go up when the underlying benchmark, in this case the Japanese market, go down. Currently available inverse Japan ETFs include:

ProShares UltraShort MSCI Japan (NYSEArca: EWV). EWV tries to reflect -200% returns of the MSCI Japan Index on a daily basis. The fund has an expense ratio of 0.95% and holds 340 companies. Sector weightings include: industrials 20%, consumer discretionary 19.01%, financials 17.71%, info tech 13.72%, materials 7.81%, health care 5.8%, utilities 5.36%, consumer staples 5.15%, telecom services 3.89% and energy 1.55%. EWV has crossed its 50-day moving average and is coming up to its 200-day moving average. [Japan Worries Impact ETFs.]

ProShares UltraShort Yen (NYSEArca: YCS). YCS tries to reflect the daily investment results that correspond to -200% of the U.S. dollar price of the yen. The fund has an expense ratio of 0.95%. The fund has been trailing around its 50-day moving average as more currency is being converted to yen to pay for the reconstruction effort.