How Japan ETF GSJY Can Stand out From Foreign Equities Pack

It’s the age of the foreign equities ETF, with investors clamoring for shares of ex-U.S. offerings. That rush for international equities saw the category set records for inflows in January, with the overall space off to a strong start in the new year. Finding a standout fund in the wide and growing category, then, becomes an important task. The Japan ETF GSJY offers a strong option with its targeted single market focus and appealing data.

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The Goldman Sachs ActiveBeta Japan Equity ETF (GSJY) charges a 25 basis point fee for its multifactor approach. The strategy tracks the firm’s proprietary, multifactor Japan index. GSJY invests in stocks displaying healthy momentum, low volatility, high quality, and good value. 

Together, that has led the ETF to invest in well known names like Toyota (TM) and Mitsubishi (MTSUY) as its top-weighted holdings as of writing. The fund has taken that strategy and returned 14.45% YTD per ETF Database, and 40.1% over the last year. Its YTD performance numbers in particular have helped the fund outperform the MSCI ACWI Ex US Total Return index.

What’s more, now could be a strong moment for investing in the fund. The ETF’s price of $53.20 as of February 27 on YCharts sat above both its 50- and 200-day simple moving averages (SMAs), a traditional indicator of a buy opportunity.

Why Japan? The country has seen some strong performance of late as investors continue to diversify away from expensive U.S. stocks. At the same time, markets have responded positively to dovish appointments to the Bank of Japan (BOJ) board. 

Together, it could present an appealing option to diversify away from U.S. concentration risk. By adding a Japan ETF on top of a core allocation, in a satellite role, investors can get exposure to the rising role of foreign equities. 

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