Looking back at 2013, not many markets outside of the United States performed well throughout the year. However, thanks to Prime Minister Shinzo Abe’s aggressive yen-hedging policies, Japan has excelled and risen above the fray. A similarly aggressive way to capitalize on continued Japanese market gains is the Direxion Daily Japan Bull 3X Shares (JPNL).
This non-diversified exchange-traded fund (ETF) seeks, before fees and expenses, to replicate 300% of the daily performance of the MSCI Japan Index. This index measures the performance of the large- and mid-cap segments of Japan’s equity market. JPNL only began trading on June 26, 2013. Since then, this ETF has risen 27.14%. As a triple-leveraged fund, JPNL is especially volatile, as the chart below demonstrates.
This fund is invested in a broad array of sectors, including consumer cyclical, 19.19%; industrials, 18.42%; financial services, 15.81; and technology, 11.71%. It has smaller allocations to basic materials, real estate, consumer defensive, healthcare, utilities, communication services and energy. As a fund following three times the performance of a country-covering index, JPNL does not invest in any individual companies’ stocks.
With the weakening of the yen, the bull is in Japan’s shop now. As a fund that is designed to triple the gains of an index, Direxion Daily Japan Bull 3X Shares (JPNL) provides a way to grab this opportunity by the horns. Though its volatility can mean a bumpy ride, investors who hang on could see increased returns from Japan’s improving economy.
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In case you missed it, I encourage you to read my e-letter article from last week about another Japanese fund, DXJS. I also invite you to comment about my column in the space provided below.
