ETF Trends
ETF Trends

It is hard to ignore the massive December 13 strike call activity in EWJ (iShares MSC I Japan, Expense Ratio 0.48%) that occurred yesterday, and more notable is that these calls are basically at the money given EWJ’s $12.90 price currently.

Trading volume in the ETF has been roughly average for the past several sessions and EWJ continues to see support at its 50 day MA at least for the time being.

EWJ still  maintains the lead as the largest “Japan Equity” ETF in the U.S. listed universe, edging out DXJ (WisdomTree Japan Hedged Equity, Expense Ratio 0.48%) which has about $17 billion in AUM.

There is a steep drop-off to the next largest fund in the space, DBJP (Deutsche MSCI Japan Hedged Equity, Expense Ratio 0.45%), which has a respectable $1 billion in AUM.

It is clear to us based on public statements that have been made in the past several years that EWJ and DXJ, and potentially other ETFs in the Japan Equity space are not only utilized by investment managers and retail investors but the Bank Of Japan and Japanese pension funds are comfortable utilizing these long Japan ETFs in the marketplace as part of their open market operations and “liquidity” programs.

Thus, it is hard to see an abrupt end to the steady inflows that have occurred in these funds throughout the past several years, and the interest in various niches outside of “Large Cap” and/or “Hedged” Japan products continues to grow as evidenced in the multiple fund offerings in the space.

Outside of the mega-sized EWJ and DXJ, we have mentioned in the past several other “Japan Equity” funds that are newer to the picture but have still managed to make names for themselves in terms of asset growth over short periods of time, including HEWJ (iShares Currency Hedged MSCI Japan, Expense Ratio 0.48%, $577 million in AUM), as well as lesser known but newer funds like DXJS (WT Japan Hedged SmallCap Equity, Expense Ratio
0.58%), DXJR (WT Japan Hedged Real Estate, Expense Ratio 0.43%), DXJF (WT Japan Hedged Financials, Expense Ratio 0.43%), DXJH (WT Japan Hedged Health Care, Expense Ratio 0.43%), DXJT (WT Japan Hedged Tech, Media, and Telecom, Expense Ratio 0.43%), and DXJC (WT Japan Hedged Capital Goods, Expense Ratio 0.43%).

iShares MSCI Japan ETF

For more information on Street One ETF market commentary and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com

Street One Financial is an educational/research firm utilizing the Broker Dealer services of Precision Securities, a FINRA registered Broker/Dealer.