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.