MDD’s sizable weight to Japanese equities should prove to be a plus amid an influx of pension to the country’s equity markets. [Pension Buying Could Lift Japan ETFs]
Japan’s “domestic economy has seemed to have weathered the VAT increase relatively well. Given earnings have been pretty good, the weak price action in Japan has brought valuations down quite a bit. If you believe that the Abe policies are positive for growth, this could be a decent entry point for Japanese equities. Over the medium to long term, the push to move the GPIF (Japanese Government Pension Investment Fund) more into equities at the expense of bonds could bring in a large marginal buyer of Japanese equities,” added Murray.
Making MDD an even more interesting option is valuation. As in global mid-caps are not richly valued compared to U.S. mid-caps or international small-caps. Murray notes MDD trades at a discount to the iShares Russell Midcap ETF (NYSEArca: IWR) and the iShares MSCI EAFE Small-Cap ETF (NYSEArca: SCZ).
SPDR S&P International Mid Cap ETF
