Investing in Japanese stocks can be a smart move for those looking to diversify their portfolio and tap into the world’s third-largest economy. However, with so many options available, it can be challenging to know where to start. In this article, we’ll take a closer look at three popular Japanese ETFs: FLJP, JPXN, and EWJ.
FLJP: The ETF with the Lowest Fees
The Franklin FTSE Japan ETF (FLJP) is an excellent option for investors looking for low fees. With an expense ratio of just 0.09%, FLJP is one of the most affordable Japanese ETFs on the market. This means that investors can keep more of their returns and potentially earn higher profits over time.
FLJP tracks the FTSE Japan Capped Index, which includes large and mid-cap Japanese companies. The ETF’s top holdings include Toyota, Sony, and SoftBank Group, among others. As of August 2021, FLJP has a total net asset value of $1.4 billion and an average daily trading volume of 43,000 shares.
One potential downside of FLJP is that it may not provide as much exposure to smaller Japanese companies as some other ETFs. However, for investors looking for a low-cost way to invest in large and mid-cap Japanese stocks, FLJP is an excellent choice.
JPXN: The ETF with the Best 1-Year Performance
The iShares JPX-Nikkei 400 ETF (JPXN) is an excellent option for investors looking for strong performance over the past year. As of August 2021, JPXN has returned over 38% over the past 12 months, making it one of the best-performing Japanese ETFs on the market.
JPXN tracks the JPX-Nikkei 400 Index, which includes 400 high-quality Japanese companies selected based on factors such as profitability, return on equity, and market capitalization. The ETF’s top holdings include Nintendo, Keyence, and Sony, among others. As of August 2021, JPXN has a total net asset value of $2.5 billion and an average daily trading volume of 57,000 shares.
One potential downside of JPXN is that it may not provide as much exposure to smaller Japanese companies as some other ETFs. However, for investors looking for strong performance over the past year, JPXN is an excellent choice.
EWJ: The Most Liquid Japanese ETF
The iShares MSCI Japan ETF (EWJ) is an excellent option for investors looking for a highly liquid Japanese ETF. With an average daily trading volume of over 10 million shares, EWJ is one of the most actively traded Japanese ETFs on the market. This means that investors can easily buy and sell shares of EWJ without worrying about liquidity issues.
EWJ tracks the MSCI Japan Index, which includes large and mid-cap Japanese companies. The ETF’s top holdings include Toyota, Sony, and SoftBank Group, among others. As of August 2021, EWJ has a total net asset value of $16.7 billion.
One potential downside of EWJ is that it may not provide as much exposure to smaller Japanese companies as some other ETFs. However, for investors looking for a highly liquid Japanese ETF, EWJ is an excellent choice.
Which Japanese ETF is Right for You?
When it comes to investing in Japanese stocks, there is no one-size-fits-all solution. The right ETF for you will depend on your investment goals, risk tolerance, and other factors. Here are some key considerations to keep in mind when choosing a Japanese ETF:
– Fees: If you’re looking to keep costs low, consider an ETF like FLJP with a low expense ratio.
– Performance: If you’re looking for strong performance over the past year, consider an ETF like JPXN.
– Liquidity: If you’re looking for a highly liquid ETF, consider an ETF like EWJ.
It’s also important to consider factors like diversification, exposure to different sectors and industries, and the overall health of the Japanese economy when choosing a Japanese ETF.
Conclusion
Investing in Japanese stocks can be a smart move for those looking to diversify their portfolio and tap into the world’s third-largest economy. FLJP, JPXN, and EWJ are three popular Japanese ETFs that offer different benefits to investors. Whether you’re looking for low fees, strong performance, or high liquidity, there is a Japanese ETF that can meet your needs. As always, it’s important to do your research and consult with a financial advisor before making any investment decisions.
