Research > ETFs > ETF / ETP Commentary > 

This Non-US Developed Market May Win Big in 2020

Once again, the U.S. is getting all the love among major developed equity markets this year and rightfully so with the S&P 500 higher by 26.23%. However, Japan has been a decent performer, too, and that theme could continue in 2020.The iShares MSCI Japan ETF (EWJ A) and the WisdomTree Japan Hedged Equity Fund (DXJ A-) are both up more than 18% year-to-date.“An expected recovery in Japanese corporate earnings will drive their stock prices higher, predicted Morgan Stanley, UBS, and Nomura,” reports CNBC. “That comes after two consecutive years of earnings declines in Japan, due largely to a stronger yen and U.S.–China trade tensions, said UBS.”The iShares MSCI Japan ETF is the largest Japan-related ETF by assets, following a traditional market capitalization-weighted indexing methodology.A fund such as the WisdomTree Japan Hedged Equity Fund can help investors gain exposure to Japan’s local markets without worrying about potential foreign exchange currency risks in case of a weakening yen currency or stronger U.S. dollar.Jumping For JapanJapan itself is recovering from its own economic doldrums with employment rates and wage growth starting to come to life. This is a welcome sign, particularly after the last 30 years have been marked by stagnant growth following an asset bubble burst that spawned the “Lost Decade” of Japan in the early 90s to the early 2000s.“Economists from Morgan Stanley have even forecast zero growth in Japan in 2020. But the bank’s equity analysts said ‘positive structural trends’ in the country — such as improving corporate governance and profitability — could help Japanese stocks to maintain or increase their value,” according to CNBC.Japan does show some solid fundamentals. Specifically, the weaker yen, strong corporate fundamentals, bargain valuations and central bank buying are all positives. Furthermore, Japan’s political temperature is relatively stable. Additionally, stocks in the world’s third-largest economy are inexpensive relative to their U.S. counterparts.“In addition, the U.S. dollar is expected to edge higher versus the Japanese yen by March 2020, said Nomura. That would benefit Japanese companies that generate income overseas, such as exporters, according to the bank,” reports CNBC.This article originally appeared on ETFTrends.com.

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.