Japanese equities continue to catch a bid despite price choppiness lately, and one has to wonder whom is buying anymore, is it bona fide money managers or central banker types, or both? Both EWJ and DXJ have consistently pulled in new assets lately amid the $1 trillion of stimulus talk that continually comes out of the Shinzo Abe “Abenomics” textbook, and the policies do not seem to have undisputed support.
We see a quote from the overnight session in the New York Times that flatly states “Abenomics has just been a mixed bag of tricks so far,” according to Takao Komine, a “specialist on economic policy at Hosei University in Tokyo.” EWJ has pulled in a whopping $2.09 billion in new assets year to date in 2014 as it maintains its advantage over DXJ as the largest Japan equity based ETF in the U.S. listed landscape with $15.3 billion.
DXJ (WisdomTree Japan Hedged Equity, Expense Ratio 0.48%) on the other hand has approximately $12.5 billion in assets under management, but has actually seen some net outflows year to date (->$685 million). Trading volume in both EWJ and DXJ have been significantly elevated throughout late October to the current spot in November, and it is likely to stay that way for the foreseeable future given the backdrop of central bankers and Japanese pension funds admittedly buying Japan based ETFs in the marketplace at times.
In this space, DBJP (Deutsche MSCI Japan Hedged Equity, Expense Ratio 0.45%) has enjoyed a decent year as well in terms of asset raising, pulling in >$239 million and bringing its total asset base north of $600 million.
Outside of those, there is a rather steep drop-off in terms of asset levels throughout the rest of the Japan Equity listed products here in the U.S., and we would expect the large institutions to confine their ETF buying mostly to EWJ and DXJ at least for the time being.
In terms of Japan, we also have our eyes on FXY (CurrencyShares Japanese Yen, Expense Ratio 0.40%) which is trading at another new low since inception (Yen itself is trading at a seven
year low), and this fund continues to have a hard time with assets leaving the door amid the Yen’s plight (-$72 million year to date, on very heavy trading volume lately).
iShares MSCI Japan ETF
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