Given the rising inflationary outlook, Japanese investors may be more motivated to shift into riskier assets and dividend-paying stocks as a new inflation hedge. [Stock ETFs Have More Room to Run in Low Inflationary Environment]
The WisdomTree Japan SmallCap Dividend Fund (NYSEArca: DFJ) is the only dividend-focused Japan stock ETF available. DFJ has a 2.21% 12-month yield. In comparison, average dividend yields in Japan hover around 1.9%, according to Boost ETP.
Investors interested in Japanese markets can also look at other broad Japan ETFs, including the iShares MSCI Japan ETF (NYSEArca: EWJ), WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) and db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP). DXJ and DBJP try to hedge the negative effects of a depreciating yen currency on the overall fund’s performance. EWJ has a 1.17% 12-month yield, DXJ has a 1.28% 12-month yield and DBJP has a 2.01% 12-month yield. [Japan ETFs Fly on Abenomics’ Third-Arrow]
For more information on Japan, visit our Japan category.
Max Chen contributed to this article.