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Japan ETF (EWJ) Hits New 52-Week High

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For investors looking for momentum, iShares MSCI Japan ETF (EWJ - Free Report) is probably on your radar now. The fund just hit a 52-week high. Shares of EWJ are up roughly 17.5% from their 52-week low price of $44.60/share.


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


EWJ in Focus


EWJ focuses on providing exposure to the equities in Japan. It charges 48 basis points in fees per year. From a sector look, it has high exposure to Consumer Discretionary, Industrials, and Financials, with 20.04%, 19.95%, and 13.44% allocation, respectively (as of May 2, 2017). It has top holdings in Toyota Motor Corp, Mitsubishi UFJ Financial Group Inc, and Softbank Group Corp with 4.55%, 2.60%, and 2.03% allocation, respectively (as of May 2, 2017) (see all Asia Pacific (Developed) Equity ETFs here).


The fund has AUM of $15.91 billion and trades in average volumes of 5.84 million shares.


Why the Move?


The move can mainly be attributed to Japan’s strong earnings results. The Nikkei 225 is up over 1.25% in the past 5 days and closed at 19,445.70 on May 2, 2017. Moreover, global confidence seems to be growing, as U.S. tech giants posted strong earnings and led the Nasdaq to reach record highs. The results of the first run-off to the French elections also increased global confidence as Emmanuel Macron is expected to emerge victorious in the second run-off on May 7, 2017. Therefore, investors are confident and are looking at this region as a potential investment.


More Gains Ahead?


Currently, EWJ has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. So it is hard to get a handle on its future returns one way or another. It has a low 14-day volatility of 7.46% and a weighted alpha of 13.10. So, there is definitely some promise for those who want to ride this surging ETF a little further.


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