After Japan revealed a weakening economy, observers are anticipating further stimulus to help right the market. In the meantime, investors who want to capitalize on any further expansionary policies should consider a equity-hedged exchange traded fund to diminish any negative effects of a depreciating yen.
On the upcoming webcast, Is Your Japan ETF Positioned to Benefit from Japan’s Recent Shift?, Dan Brehon, Director of FX Strategy at Deutsche Bank, Ron Saba, Senior Managing Director of Investment Management at Horizon Investments, and Lance Allen, ETF Regional Vice President at Deutsche Asset & Wealth management, explain how currency protection could help investors gain pure Japanese equity exposure and capture a recovering market without currency risks.
For instance, thee Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) tries to reflect the performance of the MSCI Japan U.S. Dollar Hedged Index, which mitigates the exposure to fluctuations between the value of the U.S. dollar and Japanese yen. Consequently, DBJP could outperform a non-hedged Japan equity fund if the yen continues to depreciate against the USD. [Japan ETFs Find Double Support From BOJ, Pension Fund]
So far this year, the Japanese yen has depreciated about 10% against the U.S. dollar. Meanwhile, the MSCI Japan Index declined about 3.9% year-to-date, whereas DBJP rose 5.5%.