It’s no secret that technology in the U.S. has been a stellar outperformer in an uncertain market environment thanks to Covid-19. However, it’s not just in the U.S. where tech is thriving as new firms in Japan could also help spur its economy in a post-Covid-19 environment.
This new rise in tech could be exactly what Japan needs as the economy still continues to feel the after-effects of the coronavirus pandemic.
“One stock market where a raft of technology-focused companies is beginning to emerge – and excite some of the UK’s investment houses – is Japan,” a This is Money article noted. “According to experts, Japanese technology companies provide UK investors with the opportunity to make solid returns over the next five to ten years because Japan is way behind the US in digitalizing its economy.”
“So innovative businesses, developing industry-leading technologies, could grow rapidly as the economy modernizes,” the article added further. “Nicholas Weindling manages the £1billion investment trust JPMorgan Japanese from offices in Tokyo. His investment record is exemplary, delivering returns for shareholders of just under 100 percent over the past five years.”
Japan ETFs to Consider
One such exchange-traded fund (ETF) that could stand to benefit from this rise in tech firms could be the Xtrackers Japan JPX-Nikkei 400 Equity ETF (JPN). JPN seeks investment results that correspond generally to the performance, before fees and expenses, of the JPX-Nikkei 400 Net Total Return Index.
The index is designed to track the performance of equity securities of issuers who are primarily listed on the following sections of the Tokyo Stock Exchange (“TSE”): the 1st section, the 2nd section, Mothers or JASDAQ. The fund will invest at least 80% of its total assets in component securities of the underlying index.
Investors looking for exposure to Japan can look at exchange-traded funds (ETFs) like the Xtrackers MSCI Japan Hedged Equity ETF (DBJP). DBJP seeks investment results that correspond generally to the performance, of the MSCI Japan US Dollar Hedged Index.
The fund, using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, of the underlying index, which is designed to track the performance of the Japanese equity market while mitigating exposure to fluctuations between the value of the U.S. dollar and the Japanese yen. It will invest at least 80% of its total assets in component securities (including depositary receipts in respect of such securities) of the underlying index.
For more market trends, visit ETF Trends.com.