What is ‘Japan ETFs’
A type of exchange-traded fund that invests the majority of its assets in Japanese equities that trade on local stock exchanges. The performance of Japan ETFs does not correlate to the performance of the underlying index when measured in U.S. dollars, because the change in the exchange rate between the yen and the dollar must be taken into consideration. The performance of Japan ETFs is thus dependent on two things: the performance of the underlying equities and the effect of changing yen into dollars.
Explaining ‘Japan ETFs’
Japan ETFs are managed passively around a broad underlying index, such as the MSCI Japan Index, which represents over 75% of the total market capitalization of all listed Japanese equities.
The Tokyo Stock Exchange is one of the largest and most progressive markets in Asia, making the country a frequent source of investor focus and attention. Japan ETFs allow for a single diversified investment in the country while also making a bet on the strength of the yen versus the dollar.
Because of the depth of Japan’s equity markets, ETFs that focus on large- or small-cap stocks are available. As with several of the larger, more liquid ETFs, some Japan ETFs can be sold short and are even accessible through listed options.
Japan Etfs FAQ
Are Japanese stocks a good investment?
What is the best ETF for 2020?
What is the best healthcare ETF?
Are leveraged ETFs a good idea?
Which is the best Vanguard ETF?
What ETF should I invest in 2020?
What is the FTSE Japan Index?
Further Reading
- Tracing financial innovation diffusion and substitution trajectories. Recent evidence on exchange-traded funds in Japan and South Korea – www.sciencedirect.com [PDF]
- ETFs performance Europe-a good start or not? – www.sciencedirect.com [PDF]
- Japan and Hong Kong exchange-traded funds (ETFs): Discounts, returns, and trading strategies – link.springer.com [PDF]
- ICT technologies and financial innovations: The case of exchange traded funds in Brazil, Japan, Mexico, South Korea and the United States – www.sciencedirect.com [PDF]
- Where does return and volatility come from? The case of Asian ETFs – www.sciencedirect.com [PDF]
- Unconventional monetary policy and inequality: is Japan unique? – www.tandfonline.com [PDF]
- Japan's Financial Markets: The Lost Decade – papers.ssrn.com [PDF]
- Exchange-traded funds in bullish and bearish markets – www.tandfonline.com [PDF]