Overview of DXJF
The WisdomTree Japan Hedged Financials (DXJF) seeks to provide exposure to the Japanese financials sector. This index is hedged against fluctuations in the yen for US investors and is market-cap-weighted. DXJF is the only ETF to provide exposure to Japanese financial stocks. Trading activity in the DXJF fund has been scarce with only a few thousand shares trading hands each day. The top five holdings of this ETF are Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group (MTU), Tokio Marine Holdings (TKOMY), Dai-Ichi Life Insurance Company, and Nomura Holdings (NMR)(N).
Year-to-date, shares of DXJF have underperformed developed market indexes and plunged 29.1%. Japan stock markets (EWJ) have suffered ever since they adopted a negative rate policy. Since the Bank of Japan’s announcement on a negative rate policy, the banking and financial industry has witnessed a heavy sell-off, which has led to the yen’s biggest gain since the 1990s.
Moving average analysis
On February 19, DXJF closed at $18.45, which was below its 100-day, 50-day, and 20-day moving averages of $25.31, $23.28, and $20.43, respectively.
The chart above shows that DXJF is trading below its moving averages on February 19, thereby signaling a bearish trend.
Relative strength index
The 14-day relative strength index (or RSI) for the DXJF ETF is 33.9 as of February 19, suggesting it is nearly oversold. An RSI figure below 30 is an indication of an oversold stock while an RSI above 70 indicates an overbought stock.