iShares MSCI Japan Index EWJ Fact Sheet

iShares MSCI Japan Index (EWJ) is an ETF (exchange traded fund). Many investors and traders are familiar with EWJ, the ticker, but more often than not, I find that individuals misunderstand what EWJ really represents. I first created this fact sheet in 2007 as a reference page on my website (http://steventowns.com) and I update it periodically.

EWJ Fact Sheet:

  • EWJ does not track/mirror the Nikkei 225 Stock Average (N225), but rather the Morgan Stanley Capital International (MSCI) – Japan Index
  • EWJ is used as a proxy for investing directly in Japan (in ordinary shares) by institutional and retail investors
  • EWJ consists primarily of large-cap stocks trading on the Tokyo Stock Exchange (TSE) TOPIX 1st Section
  • EWJ (its market price) is helped by a strong yen and hurt by a weak yen; although, unhedged, a strong yen typically hurts the overseas operations/earnings of Japanese companies (see below)
  • EWJ may trade to the upside, even if the benchmark N225 was down, if the yen appreciates, and the opposite is true
  • EWJ began trading in March 1996; it is listed on the NYSE
  • EWJ is typically among the most actively traded country-based ETFs (liquid, narrow bid-ask)
  • EWJ is optionable, but volume is typically (or may be) light
  • EWJ can be shorted, but it may not be easy to locate stock
  • *EWJ has 324 stock holdings
  • *EWJ includes Toyota, Honda, Mitsubishi UFJ, Canon, and Sumitomo Mitsui FG among its top-5 holdings
  • *EWJ has 21% of assets in its top-10 holdings
  • *EWJ has an expense ratio of 0.56%
  • *EWJ has total net assets of over $4.1 billion

* Note: As of November 11, 2010, based on publicly available information.

Disclosure: No position in EWJ at time of publishing.

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