Top ETF Review for Investing in Asia – DBJP, DXJ and CQQQ

Performance of Spearheads
Versus Mature and Emerging Markets

A review of the top picks in the exchange traded fund (ETF) category is a prudent approach to investing in Asia. On the whole, the stock markets in the budding regions of the world have a way of soaring and plunging far more than their peers in the mature countries. This hallmark applies to the bourses of Asia as much as anywhere else.

Unfortunately, the emerging regions as a whole have fared a lot worse than the U.S. market in recent years. Amid the widespread funk, however, Japan and China have turned into a couple of hotspots on the global stage.

Over the past three years, the best performance was turned in by the MSCI Japan US Dollar Hedged Index fund, which trades in the U.S. under the ticker symbol of DBJP. The total return for the dynamo, given by the sum of capital gain plus dividend yield, came out to an annual gain of 28.15% on average over a 3-year period ending in spring 2015.

During the same timespan, the runner-up was the WisdomTree Japan Hedged Equity ETF. The index fund, which runs under the banner of DXJ, racked up 26.54% a year on average.

Meanwhile the third slot was nabbed by the Guggenheim China Technology ETF, which sports the call sign of CQQQ. The tracking vehicle scored an average gain of 25.92% a year.

By way of comparison, the flagship fund within the mature economies takes the form of SPY. The beacon chalked up an advance of 18.11% a year over the same interval. Meanwhile the heavyweight for the emerging markets lies in VWO, which eked out a mere 4.94% per annum.

From a different slant, a graphic survey of the price action over a longer time frame provides a wholesome view of the markets. For this purpose, a fitting window is a span of half a decade, which is long enough to cover the crash of the stock market in the autumn of 2011 as well as the recovery in the years to follow.

The visual plot serves to highlight the advantage of SPY in terms of ample growth coupled with muted risk over the entire stretch. More precisely, the flagship ETF turned in an admirable showing compared to its rivals in terms of risk-adjusted growth over the course of half a decade.

NOTE: The full briefing is a document in PDF form, available for online reading or offline download. The report, listed under the title of “Top ETF Review for Investing in Asia”, resides at the Library at MintKit Core.

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