Japan Funds Dominate
It's been a good year for Japanese stocks. The broad market in the country, as measured by the iShares MSCI Japan ETF (EWJ | B-98), gained 8% in 2015 thanks to powerful monetary stimulus from the Bank of Japan, including the purchases of bonds, stocks and ETFs.
But as well as EWJ has performed, a number of smart-beta ETFs tied to the country have done even better. A total of four such ETFs made this top 10 list, including the WisdomTree Japan SmallCap Dividend ETF (DFJ | B-95) and the WisdomTree Japan Hedged SmallCap Equity ETF (DXJS | C-67), with gains of more than 16%.
Instead of focusing on market cap, DFJ ranks its holdings based on dividends. Meanwhile, DXJS is essentially the currency-hedged version of DFJ. The fund neutralizes its foreign currency exposure by shorting the yen.
The other two Japan ETFs to make the list are the iShares MSCI Japan Minimum Volatility ETF (JPMV | B-80) and the SPDR MSCI Japan Quality Mix ETF (QJPN | C-91), up 13.8% and 10.7% for the year, respectively.
Like its name implies, JPMV chooses its holdings to minimize the volatility of the fund. Meanwhile, QJPN takes it a step further by choosing its holdings based on three factors: low volatility, value and quality.
Other Smart-Beta Outperformers
Rounding out the top 10 were an eclectic group of funds. The PowerShares KBW Property & Casualty Insurance ETF (KBWP | B-62) rose by 12.7%, while the PowerShares DWA Consumer Staples Momentum ETF (PSL | B-64) added 12.3%.
Finally, the WisdomTree International Hedged Quality Dividend Growth ETF (IHDG | B-47) advanced 10.4%, while the WisdomTree Europe SmallCap Dividend ETF (DFE | C-79) returned almost 10%.
2015 Top 10 Smart-Beta ETFs
Returns through Dec. 18, 2015
Contact Sumit Roy at [email protected].