Japan: Weekly ETF and CEF Performance

The Nikkei 225 has been particularly volatile in recent trading. After a four day rally ended last Mon., the N225 lost more than 600 points on Tues. and Wed. combined (500+ on Wed. alone), rallied nearly 200 points Thur., but gave back almost 120 on Fri. Bulls will be pleased with today's 265 point gain to recover the 17,000 level.

The Nikkei 225 is still about 1,300 points from its 52-week and multi-year high of 18,300.39 (intra-day; it closed at 18,215.35) set on Feb. 26. (See chart below)

Speculation about the yen carry trade continues, which means we'll see a lot of action day-to-day, but yen weakness is likely to persist. As I've written before, there are a number of factors working against an unwinding of the carry trade. New support includes the strong unlikelihood of a BoJ rate hike this Tuesday and the PBoC's hike over the weekend.

The 10 Japanese ETFs (including 2 CEFs) trading in the U.S. returned a combined average -1.9% last week. This compares to returns of +2.0%, -4.8%, +0.9% and +3.6% over the four prior weeks. (See the chart below for details)

Disclosure: The author does not own shares of any funds mentioned in this article.

Click to enlarge chart

It is obvious from the chart every fund traded lower for the week. However, all but two funds (both closed-end) are still positive year-to-date, between 1.1% to 3.5% -- unimpressive, but positive nonetheless.

Aside from Vanguard's Pacific Stock ETF (VPL) last week (which was seemingly helped by its ~18% exposure to Australia), WisdomTree's offerings are the best performing overall, on both a weekly and year-to-date basis.

iShares MSCI Japan Index (EWJ), the most actively traded country-based ETF, lost 1.9% last week.

For your reference, here's a list of the 10 funds:

iShares MSCI Japan Index (EWJ)
iShares S&P/TOPIX 150 (ITF)
Japan Equity Fund, Inc. (JEQ)
Japan Smaller Capitalization Fund, Inc. (JOF)
SPDR Russell/Nomura Prime Japan (JPP)
SPDR Russell/Nomura SmallCap Japan (JSC)
Vanguard Pacific Stock (VPL)
WisdomTree JP High-Yielding Equity (DNL)
WisdomTree JP SmallCap Dividend (DFJ)
WisdomTree JP Total Dividend (DXJ)