db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP)
Local Market YTD: 40.3%
ETF YTD: 39.0%
Comment: DBJP tracks the Japanese equities market while hedging against a depreciating yen through swap contracts – a weakening local currency diminishes returns in foreign currency-denominated investments once they are converted back to U.S. dollars. The WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ), which is up 32.1% year-to-date, provides a similar strategy, except DXJ’s holdings mainly consist of dividend-paying companies incorporated in Japan that derive less than 80% of their revenue from sources in Japan.