Steven Towns

Japan: Weekly ETF and CEF Performance

Andrew,

Good question and +15% premium is definitely a signal to beware! As of Friday's close it trades at a 7.8% premium (per Morningstar; CEFA shows a 10% premium as of 2/28 close).

Note ETFs don't always necessarily trade at NAV. I've seen at least 0.5% deviation/premium with some Japan ETFs, granted they have rather thin trading volume, but this is minor compared to double-digit premiums not uncommon with CEFs.

I've noticed country CEFs, esp. Japan, get ahead of themselves when there's a lot of foreign investors piling money in the country, which to this day really moves the market and spurs domestic buying. The same is also true when foreigners take profit (or get spooked as they are now and pull out).

If you are investing, then look for low, to no premium, but if you are trading, then you'll have to play the momentum and assume there'll be premium to pay as others are buying as well.

Hope this helps.

Disclosure: I do not own shares of JOF.