For investors seeking momentum, iShares MSCI Japan Small-Cap ETF (SCJ Quick QuoteSCJ - Free Report) is probably on radar now. The fund just hit a 52-week high and is up nearly 19.7% from its 52-week low price of $58.12/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SCJ in Focus

This ETF offers exposure to the small cap segment of the Japanese equity market. It has key holdings in industrials, consumer discretionary, information technology, consumer staples and materials. It charges investors 49 bps in annual fees (see: all Developed Asia-Pacific ETFs here).

Why the Move?

The Japanese equity market has been an area to watch lately given that the country is exhibiting the strongest growth in many years. In fact, Japan has been enjoying its longest stretch of economic growth in more than a decade. This trend is likely to continue as the industrial production data for April showed solid momentum in the economy. Industrial production rose 4% month-on-month, representing the biggest monthly increase since 2011.  

More Gains Ahead?

Currently, SCJ has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. Further, this fund might remain strong given a high weighted alpha of 15.80% and a low 20-day volatility of 7.41%. As a result, there is still some promise for investors who want to ride on this surging ETF.

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