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.
The db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP) follows a similar strategy. [Japan ETFs Rocket as Nikkei Tops 14,000]
Before Thursday’s plunge, DXJ was up about 43% year to date.
WisdomTree Japan Hedged Equity
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.