While news of Japan’s disasters were hardly cheerful, investor interest on the small island nation skyrocketed in just as short time frame, as more than a billion found its way into Japan related exchange traded funds (ETFs).
In the following week after the disaster hit Japan on March 11, Japan-related ETFs experienced $1.2 billion in inflows, writes Hung Tran for Mutual Fund Wire. On March 16 alone, Japan equity ETFs saw an estimated $700 million in inflows, the heaviest one-day inflow on record. [Could Japan Aftershocks Affect Other Markets and ETFs?]
Despite high interest in Japan ETFs, Mike Khouw, Cantor Fitzgerald’s Director of U.S. Equity Derivatives Trading, remarks that “the activity we’re seeing is call selling and put buying, and both are fairly negative” and that “the unusually heavy volume suggests there is some overhang in the Japanese market,” reports Michelle Rama for CNBC.
In the wake of recent disasters, preliminary estimates put damage over $100-200 billion, with most of the damage in infrastructure, such as roads, ports, railroads and nuclear power plants. The investment opportunity is knocking and once the rebuilding effort gets underway, it will put more people to work and money back into the economy.