Salient to Investors:
The assets of Michael Steinhardt’s WisdomTree Investments’ Japan Hedged Equity Fund have tripled since the start of 2013.
The rapid growth of the fund highlights investors’ embrace of ETFs as vehicles for short-term trades in a way traditional mutual funds, with their higher fees and trading restrictions, haven’t been used. IndexUniverse said investors invested a record $188 billion into US ETFs in 2012.
Jeremy Schwartz at WisdomTree said the yen and the Japanese stock market often move in opposite directions, and since the Japanese market moved in one direction for a long time, the new trend could last a considerable period. Most of WisdomTree’s products focus on dividend-paying stocks.
Jeffrey Gundlach at DoubleLine Capital said on December 18 that the yen would weaken and Japanese stocks would rise as currency debasement was the only policy tool left for Japan. The average economist expects Japan to grow 0.9 percent in 2013.
George Soros expects Japanese stocks to rise and has 10 percent of the money managed internally in Japanese stocks.
Macrae Sykes at Gabelli & Co. said we are seeing a migration to ETFs.
Patricia Oey at Morningstar said that because the money flowing into WisdomTree’s Japan fund is the result of a popular trade, it could disappear if the yen strengthened.
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