The iShares MSCI Japan ETF (NYSEArca: EWJ), the largest US-listed exchange traded fund tracking Japanese equities, is modestly higher this year, but investors are displaying plenty of enthusiasm for the popular Japan fund.
Further supporting the notion of buying Japan ETFs, Japanese equities are growing less correlated to the whims of its yen currency. Traders have typically driven up Japanese equities in light of a weak yen currency due to the economy’s heavy reliance on exports as a weaker currency makes their products more competitive on the global market.
“The iShares MSCI Japan ETF, known by its ticker EWJ, has taken in more than $3 billion this year — that’s already five times more than what investors put in all of last year,” reports Bloomberg. “Buyers have poured almost $800 million into U.S.-listed ETFs tracking international equities this year through Feb. 20, according to Bloomberg data. That’s a 4.3 percent jump in the strategies’ market capitalization, compared to a 0.3 percent rise in the market cap of funds tracking domestic equities.”
Alternatives to EWJ include the Deutsche X-trackers Japan JPX-Nikkei 400 Equity ETF (NYSEArca: JPN), which recently lowered its annual fee to 0.09% from 0.15%, making it one of the least expensive Japan ETFs on the market.