And like other leveraged ETFs, it is easy to see why the double-leveraged Nikkei 225 Leveraged Index ETF has caught the attention of investors. In mid-January, the ETF was trading around 5,550 yen, but by the time Nikkei peaked in May, the fund traded as high as 11,550 yen, according to Bloomberg data. Underscoring the risks associated with these products, the leveraged Nikkei ETF tumbled by roughly 4,500 yen from May 22 to June 13. The fund has since rebound to a Friday close of 9,490 yen.
U.S. investors have not warmed to the idea of leveraged Japan ETFs the way their Japanese counterparts have. The ProShares Ultra MSCI Japan (NYSEArca: EZJ), which is up 38.3% year-to-date, has average daily volume of just over 45,000 shares and had just $22.1 million in assets under management at the end of the first quarter, according to ProShares data.
ProShares Ultra MSCI Japan
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DXJ.