Interestingly, DXJF’s solid performance since its debut has not been entirely the product of a weaker yen. Arguably, the yen has not done much for DXJF as of yet as the CurrencyShares Japanese Yen Trust (NYSEArca: FXY) is off just 0.7% since DXJF came to market.

As of May 30th, the WisdomTree Japan Hedged Financials Index (WTJFH), DXJF’s underlying index, had a P/E ratio of 10.2 and price-to-book ratio of 0.77, according to WisdomTree data. Those numbers for XLF as of the same date were 14.3 and 1.32.

“I believe equity markets will remain supported as Abenomics continues to gain traction and especially as Abe makes more progress on his growth strategy for Japan (the “third arrow” of Abenomics). While broad-based approaches should continue to serve many investors well, those looking to allocate to the lowest-priced sector of the Japanese market should look to financials,” added Schwartz.

WisdomTree Japan Hedged Financials Fund Top-10 Holdings

Table Courtesy: WisdomTree