DBJP vs FLJH

DBJPBXtrackers MSCI Japan Hedged Equity ETF

FLJHAFranklin FTSE Japan Hedged ETF

In short

DBJP A yen hedge wrapped around the whole Japanese market. DBJP holds a standard MSCI Japan basket of roughly 170 large and mid-cap names and hedges the yen back to dollars, so the currency stops driving the result.

FLJH Japan stocks with the yen taken out of the equation. FLJH hedges the currency back to dollars for 0.09% a year, the same fee as Franklin's unhedged twin and a fraction of the typical Japan fund.

Stated mandate

DBJP The Fund passively seeks to track an index representing the Japanese equity market while reducing exposure to movements between the Japanese yen and U.S. dollar.

FLJH The Fund seeks to closely track, before fees and expenses, the performance of the FTSE Japan Capped Hedged Index through passive indexing, using replication or representative sampling.

Why people hold it

• DBJP The hedge is written into the benchmark, not left to a manager's currency call: the fund tracks the MSCI Japan US Dollar Hedged Index and aims to strip out yen versus dollar moves by rule.
• Costs 0.45% a year, below the median for Japan funds. Not the cheapest shelf in the aisle, but you are not paying a premium for the hedging plumbing.
• Trading since 2011, which makes it one of the longer-running yen-hedged Japan funds and gives it a record across several very different chapters for the yen.
• Broad, not boutique: roughly 170 Japanese stocks rather than a handful of exporters, so the portfolio reads as the market itself with the currency taken out.

• FLJH 0.09% a year. Currency hedging usually carries a surcharge; here it costs the same as Franklin's unhedged FLJP and far less than the median Japan fund.
• The hedge is the whole point: it aims to strip out yen-dollar moves so what you own is Japanese share prices, not a bet on the currency.
• Broad and deliberately un-top-heavy: roughly 500 Japanese companies tracked through a capped index, so no single name can swell into an outsized slice.
• Live since 2017 and one of the stronger builds in a crowded Japan peer group of index trackers.

Worth knowing

• DBJP The hedge cuts both ways. When the yen strengthens against the dollar, you give up the tailwind an unhedged Japan fund would pick up.
• Cheaper hedged competition exists. Franklin's FLJH runs the same basic idea at 0.09%, a wide gap against DBJP's 0.45% over long holding periods.
• Thinly traded next to the category's heavyweights, so bid-ask spreads and order size matter more here than with the largest Japan ETFs.

• FLJH The hedge cuts both ways. When the yen strengthens against the dollar, you give up the tailwind an unhedged Japan fund would capture.
• Thinly traded and small next to the Japan heavyweights, so bid-ask spreads can run wider than headline fee comparisons suggest.
• Distributions land once or twice a year, not monthly or quarterly, so income arrives in lumps.

Full DBJP profile⁠

Full FLJH profile⁠