With the Bank of Japan and other large institutions still piling into Japanese equities market through the JPX-Nikkei 400 Index, investors may also turn to a non-hedged ETF that tracks the same index, the Deutsche X-trackers Japan JPX-Nikkei 400 Equity ETF (NYSEArca: JPN). The JPX-Nikkei 400 Index was launched in January 2014 as a means of revitalizing the Japanese equity market. The Index employs a rigorous screening process based on return on equity, cumulative operating profit and market capitalization to select high-quality, capital-efficient Japanese companies. [Japan ETFs: Don’t Bet Against the BOJ]
Still, it is hard to accurately predict the direction these currencies may take, as we recently witnessed.
“It is difficult to pin point directional bets,” Kize Behrends, ETF Regional Vice President at Deutsche Asset & Wealth Management, told ETF Trends. “There is a whole slew of advisors who haven’t taken a stance.”
Consequently, Behrends suggests taking a half hedged approach. For instance, investors interested in Japan may use the Deutsche X-trackers Japan JPX-Nikkei 400 Hedged Equity ETF (NYSEArca: JPNH) along side a JPN position.
Max Chen contributed to this article.