WisdomTree Shares Bounce with Japan ETF

ETF Trends

Shares of WisdomTree Investments (WETF) mirrored a recovery Friday in its best-selling ETF this year, WisdomTree Japan Hedged Equity Fund (DXJ).

WETF shares have bounced late this week after finding support at the 50-day moving average. The stock, which rose more than 4%, was a top trending ticker at StockTwits on Friday.

The ETF provider’s shares were up about 94% year to date heading into Friday’s trade. Its popular DXJ fund has amassed net inflows of nearly $7.7 billion in 2013, according to IndexUniverse. Exchange products tracking Japan gathered a record $10.2 billion last month. Year-to-date flows in Japan equity ETPs have reached $23.1 billion, or 22.9% of all global equity ETP flows, according to BlackRock. [ No ‘Sell in May’ for ETF Investors]

DXJ rallied over 3% on Friday but was on track for its third weekly loss. [WisdomTree Japan ETF Thumped as Yen Surges]

However, iShares MSCI Japan (EWJ) was poised for a weekly advance of more than 1%. Investors have added $5.3 billion to the ETF so far this year.

The divergence in EWJ and DXJ this week is due to the strength of the yen versus the U.S. dollar. DXJ hedges its currency exposure, while EWJ does not. CurrencyShares Japanese Yen Trust (FXY) is up about 3% on the week.

The Japan ETFs were up Friday even though the Nikkei 225 Index ended the day lower in local trading. U.S.-listed ETFs tracking foreign stocks trade while the underlying markets are closed.

The ETFs rose amid reports George Soros’s firm, Soros Fund Management, is scooping up Japanese stocks after the recent sell-off. “Soros, who had scored gains of more than $1 billion on bets against the Japanese yen and on Japanese stocks, returned to the market this week after seeing some signs of stability in the Japanese bond market,” WSJ.com’s MoneyBeat blog reports.

Separately, Bloomberg reported Friday that Japan’s public pension fund said it will reduce its holdings of local bonds and buy equities.

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The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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