MZDAY - EWJV: Weak Yen Favours Market

2024-02-17 06:25:28 ET

Summary

• The iShares MSCI Japan Value ETF is similar to the iShares MSCI Japan ETF but with IT exposure mostly eliminated and redistributed into other sectors.
• EWJV may have more potential due to corporate governance considerations and a weaker Yen, making it a good pick for long-term investors despite Japan's run-up.
• EWJV has a lower expense ratio than EWJ, which is unusual, which is another reason to prefer it among the two.
• In general, we are optimistic on Japan.

The iShares MSCI Japan Value ETF (EWJV) is not too dissimilar from a straight value-weighted slice of the Japanese market, since so much of the Japanese market is value. We covered it in the past , focusing on the actually low risk of credit events in Japan, which was a topical angle around regional bank tremors in the US and the exposure in Japanese financial picks to US credit. Now we focus comparatively between EWJV which is basically the same as the more vanilla iShares MSCI Japan ETF (EWJ) except with the IT exposure instead re-distributed into other sectors, and the fact that EWJV may have a little more potential than the EWJ. Not because value is better right now, but because of corporate governance considerations. Both benefit from a weaker Yen, which we believe will persist. Despite the recent run-up, EWJV shouldn't be a bad pick over the next couple of years for the less timing-oriented investor....

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