DFJ vs FLJH

DFJBWisdomTree Japan SmallCap Dividend Fund

FLJHAFranklin FTSE Japan Hedged ETF

In short

DFJ Japan's small caps, filtered down to the ones that actually pay dividends. Running since 2006, holding roughly 800 names and sending cash out every quarter.

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

DFJ The fund provides exposure to Japanese small-cap equities issued by companies that pay dividends.

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

• DFJ The dividend screen does the work: holdings are Japanese small caps that pay out, not the whole sprawling small-cap universe.
• Roughly 800 holdings, so no single Japanese small cap steers the fund.
• Launched in 2006, with a long track record through Japan's deflation years and its corporate governance overhaul.
• Distributions land quarterly, tracking a rules-based index rather than a manager's stock picks.

• 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

• DFJ At 0.58% a year, it costs more than the typical Japan fund, and plain-beta rivals FLJP (0.09%) and BBJP (0.19%) charge a fraction of it.
• Trades lighter than the headline Japan funds, so spreads and limit orders matter, especially on larger tickets.
• Screening for dividend payers leaves out Japanese small caps that reinvest instead of paying, a real tilt away from the full market.

• 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 DFJ profile⁠

Full FLJH profile⁠