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A Sector ETF to Bolster Your Japanese Stock Exposure


Investors can utilize a relatively new Japan telecom, media and tech sector exchange traded fund to fill out their exposure to growth stocks in the strengthening Japanese markets.

The WisdomTree Japan Hedged Tech, Media & Telecom Fund (DXJT) provides exposure to some of Japan’s most cyclically sensitive sectors, including technology, media and telecommunication stocks. Additionally, the ETF provides an added hedged-equity focus that helps limit the negative effects of a depreciating yen currency on the investment’s overall returns. DXJT began trading April 8. [A New ETF With a Backdoor to Alibaba]

Over the past month, DXJT has been a winning theme for Japan exposure, gaining 8.6% and outperforming other broad Japan ETFs.

The iShares MSCI Japan ETF (EWJ) is up 6.1% over the past month. Meanwhile, the WisdomTree Japan Hedged Equity Fund (DXJ) has increased 6.0% and db X-trackers MSCI Japan Hedged Equity Fund (DBJP) rose 6.4% over the past month. The two hedged equity ETFs also diminish the negative effects of a depreciating yen currency. [Japan ETFs Fly on Abenomics’ Third-Arrow]

DXJT can help investors augment their Japan stock exposure in a bullish market with growth stocks. Specifically, the sector ETF includes a 57.6% weight toward technology stocks, 20.1% in telecom, 12.9% in industrials and 9.1% in consumer cycicals, according to Morningstar data.

With DXJT, investors gain a heavier tilt toward large and prominent Japanese telecom and tech names, such as Softbank Corp. 9.4%, Canon (CAJ) 7.0%, Hitachi 6.3%, Panasonic 4.6% and Sony (SNE) 3.5%.

In comparison, the other broad Japan ETFs favor consumer discretionary and financial stocks. EWJ’s top sectors include consumer discretionary 20.5%, financials 20.% and industrials 19.7%. DXJ’s sector weights include industrials 26.6%, consumer discretionary 22.0% and information technology 16.0%. Lastly, DBJP includes consumer discretionary 22.6%, financials 19.9% and industrials 19.9%.

WisdomTree Japan Hedged Tech, Media & Telecom Fund


Source: Yahoo! Finance

For more information on Japan, visit our Japan category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, 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.