Overview of EWJ
The iShares MSCI Japan ETF (EWJ) is a well known US-traded ETF that provides exposure to Japanese equities. The fund invests in a wide range of sectors. The consumer cyclical sector dominates the EWJ portfolio with a 21% weight, followed by the industrial sector at 17%. The financial services sector and the technology sector have weights of 15% and 12%, respectively.
The fund has returned ~10.5 YTD (year-to-date) as of October 23. The fund was trading in a narrow range of 12.1 to 12.4 last week ahead of Japanese flash manufacturing PMI (purchasing managers’ index). But on October 22, the manufacturing PMI data released at 52.5 for October compared to 50.9 on September 23. The metric is one of the most important economic indicators, as it shows companies’ view of the economy. This data led the ETF to gain ~0.97% on October 23.
On October 23, the top three performing industries were agriculture, beverages, and iron and steel. The graph above shows the positive performance of industries that the EWJ tracks.
Key stocks driving ETF performance
Out of the 316 constituents of the fund, 91 stocks gave positive returns on October 23. The top three performing stocks for the day were Hitachi High Technologies, Mitsubishi Gas Chemical, and Trend Micro, which gained 5.7%, 3.4%, and 3.3%, respectively.
The stocks at the bottom were IHI, Sumitomo Chemical, and Fujifilm, which returned -10.6%, -5.6%, and -4.8%, respectively.