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Investors lose interest in currency-hedged Japan fund

  • The WisdomTree (WETF -1%) Japan Hedged Equity Fund (DXJ +0.4%) has seen $2.2B in outflows this year, including withdrawals of $490.4M on July 11 alone, according to Bloomberg.
  • It doesn't mean investors/traders don't want to bet on Japan; just that - with volatility all but vanishing from forex - they're not interested in hedging. By contrast, the iShares MSCI Japan ETF (EWJ +0.2%) - not hedged at all - has seen nearly $1B in inflows. "Most ETF buyers are not long-term investors and they’re betting the dollar-yen won’t move much in three to six months," says a Tokyo-based analyst with BNP Paribas.
  • It was 2013, when the DXJ took in a whopping $9.8B as Japanese stocks rallied hard and the yen fell just as sharply.
  • Japan ETFs: DXJ, EWJ, NKY, DBJP, EZJ, EWV, JPNL, ITF, JPP, JPNS, HEWJ, FJP, QJPN, FXY, YCS, JYN, YCL
Comments (2)
  • Blackbeard
    , contributor
    Comments (108) | Send Message
     
    The withdrawal last week coincided with an earthquake in Japan.
    16 Jul, 03:47 PM Reply Like
  • kevinconway
    , contributor
    Comments (2078) | Send Message
     
    sold my position about a month ago.
    16 Jul, 04:06 PM Reply Like
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