Industry Updates

Yen fall spooks Japanese ETF investors

George Geddes


Investors sold off a significant portion of Japan ETFs, according to Ultumus data, following a difficult period for the Japanese yen. Over the last two weeks, the yen fell 1.6% against the US dollar before the market saw major sell-offs for a number of Japanese currency and equity ETFs.

The ETFS Long JPY Short USD value fell 1.0% last week in tandem with the ETF seeing outflows of $22.5m, accounting for 98% of the product. Likewise, the ProShares Ultra Yen saw its assets under management halve from $5.6m to $2.7m over the same period.

Why I still like Japan ETFs

The iShares Nikkei 225 UCITS ETF JPY, which tracks the top 225 large cap companies in Japan, is denominated in Japanese yen. Despite the ETF still performing positively, producing returns worth 1.9%, investors still sold off their holdings as the fund saw outflows of $201.7m (44.3%).

However, it was not only yen denominated ETFs which saw a large proportion of outflows over the last week. The SPDR MSCI Japan EUR Hedged ETF also nearly halved its AUM (48.9%), dropping from $7.8m to $4.0m despite its NAV appreciating by 2.1%.

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