Yesterday in this segment we reviewed U.S. Financial sector specific ETFs which provides an opportunity to examine the same sector, but in the country of Japan.
While no “Financial sector” specific ETFs exist that target Japan listed currently in the U.S., it should be no secret that there are a handful of Japanese financial institutions that have significant global footprints.
That said, a number of these individual stocks have prominent weightings in well-known Japan based ETFs such as EWJ (iShares MSCI Japan) and with Financial equities rising in tandem globally of late, it is certainly worth watching such funds closer than ever.
Top holdings of EWJ include Mitsubishi UFJ Financial Group Inc, Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. for example, as these stocks are the #2, #4, and #5 top weighted components in the fund.
The second largest Japanese based equity ETF in terms of assets after EWJ (which has approximately $4.8 billion in AUM) is DXJ (WisdomTree Japan Total Dividend), which also has significant allocations toward Financial equities in Japan including Mitsubishi UFJ, Mizuho, and Sumitomo as well.
A third notable ETF that has a Japan focus is NKY (Maxis Nikkei 225 Index) which tracks the Nikkei 225 Index. Interestingly, this fund does not have significant top tier exposure to Financials, as the top holdings are spread across industries including Consumer Discretionary, Industrials, Telecoms, and Technology for instance.
Finally, another alternative in the space is ITF (iShares S&P/TOPIX 150) which concentrates on large cap equity names that are representative of the Tokyo stock market. Top holdings in this fund include once again financial names like Mitsubishi UFJ, Sumitomo, and Mizuho, among other wellknown Japanese companies in different industries. A
fter soaring for the first few months of the year, Japanese equities lost their luster beginning in May, with EWJ for example taking a nosedive from the $10s down to as low as $8.56. The fund has recovered somewhat, but Japanese equity returns continue to lag those of the U.S. Year to date, with the S&P 500 Index returning 12.17%, NKY is up 3.91%, DXJ +2.23%, ITF +1.78%, and EWJ has risen only 0.99%.
iShares MSCI Japan
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