Investors still seeking a way to access the relatively cheaper Japanese equities market may be better served with a currency-hedged stock ETF, like the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP). DBJP shows a 14.7 price-to-earnings ratio and a 1.1 price-to-book, compared to the S&P 500 Index’s 17.6 P/E and 2.5 P/B.
“A hedged japan is the preferred exposure given policy dynamics,” Saba said.
Lance Allen, ETF Regional Vice President at Deutsche Asset & Wealth management, explains that DBJP tries to reflect the performance of the MSCI Japan U.S. Dollar Hedged Index. The index mitigates the exposure to fluctuations between the value of the U.S. dollar and Japanese yen, which could allow the hedged fund to outperform a non-hedged if the yen continues to depreciate against the dollar.
Financial advisors who are interested in learning more about a Japanese hedged-equity strategy can listen to the webcast here on demand.