Chart Courtesy: Rareview Macro. Chart dated May 21, 2015
The expectation of further yean weakness is prompting investors to allocate new capital to yen hedged ETFs, which are already among this year’s top asset-gathering ETFs. Since the start of this month, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) has added over $195 million in new assets, up from $68.3 million as of May 18. [Investors Still Like Japan ETFs]
DXJ has added $3.5 billion in new assets this year, a total surpassed by just four other ETFs. The Bank of Japan’s loose monetary policy is performing as intended, with governor Haruhiko Kuroda stating that the economy is growing and inflation is inching higher. Consequently, the BOJ may hold off on further monetary easing. [Aggressive Easing Sustains Japan ETFs]
The Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) has impressed as well. As of May 18, DBJP’s May inflows were just over $93 million, but that number has since climbed to $117.4 million.
Investors preference for Japan ETFs is not limited to large-cap far, such as DBJP and DXJ. The WisdomTree Japan Hedged Small Cap Fund (NasdaqGM: DXJS) has added $14 million this month, up almost 40% since May 18.
DXJS’ $14 million in May inflows represent nearly 8% of the ETF’s $178.5 million in assets under management. FXY’s modest 1.6% year-to-date dip has helped propel DXJS higher by nearly 19%.