The Nikkei 225 lost more than 5% on Thursday but after-hours futures contracts based on the index rebounded following a report Japan’s public pension fund is mulling a change that may let it boost its allocation to domestic stocks.
WisdomTree Japan Hedged Equity (NYSEArca: DXJ) and iShares MSCI Japan Index ETF (NYSEArca: EWJ) were down less than 1% in early U.S. trading Thursday, reflecting the recovery in Nikkei futures. U.S.-listed ETFs tracking foreign stocks trade while the underlying markets are closed.
Reuters reported Japan’s public pension fund with over $1 trillion could alter its portfolio strategy to chase the rally in Japanese equities.
“The changes, yet to be finalized, would mark the most significant revision in investment strategy for the world’s largest pension fund since 2006 and highlight the game-changing economic policies of Prime Minister Shinzo Abe,” Reuters reported.
The Japanese ETFs experienced violent sell-offs last week after a huge rally in 2013. DXJ is down about 10% the past five sessions.
WisdomTree Japan Hedged Equity
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