For investors seeking momentum, WisdomTree Japan Hedged SmallCap Equity ETF (DXJS Quick QuoteDXJS - Free Report) is probably on radar. The fund just hit a 52-week high and is up 20% from its 52-week low price of $39.91/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 of where it might be headed:

DXJS in Focus

WisdomTree Japan Hedged SmallCap Equity ETF offers small-cap exposure to Japanese dividend-paying companies while hedging exposure to fluctuations between the U.S. dollar and the yen. It has key holdings in industrials, consumer discretionary, materials, and information technology. WisdomTree Japan Hedged SmallCap Equity ETF charges 58 bps in annual fees (see: all the Developed Asia Pacific ETFs here).

Why the Move?

The Japanese ETF has been an area to watch lately, given rising Japanese stocks and a strong dollar. Foreign investors have been net buyers of Japanese stocks for six straight weeks, the longest streak since 2019, amid hopes for continued easy-money policy, driving the stocks higher. On the other hand, dollar is on the rise on Fed’s longer-than-expected rate hike expectation.

A strong greenback eats away foreign investment gains when repatriated in U.S. dollar terms, pushing them into the red even when international stocks perform well. As such, the strength in the greenback is compelling investors to recycle their portfolios into currency-hedged ETFs.

More Gains Ahead?

Currently, DXJS  has a Zacks ETF Rank #3 (Hold) with a Medium 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. So, there is definitely some promise for those who want to ride this surging ETF a little further.