DXJ vs SCJ

DXJBWisdomTree Japan Hedged Equity Fund

SCJAiShares MSCI Japan Small-Cap ETF

In short

DXJ Japanese stocks with the yen taken out of the math. DXJ has run its hedged, dividend-screened index since 2006, pairing roughly 400 Japanese companies with a hedge against yen-dollar swings.

SCJ Japan past the household-name exporters. SCJ holds roughly 800 of the country's smaller listed companies, the domestic slice that large-cap Japan benchmarks leave out, and it has been running that mandate since 2007.

Stated mandate

DXJ The fund seeks to track the WisdomTree Japan Hedged Equity Index, providing Japanese equity exposure while reducing the effect of yen-dollar currency movements.

SCJ The fund seeks to track an index composed of small-capitalization Japanese equities.

Why people hold it

• DXJ The hedge is the point: the index aims to strip out yen-dollar moves, so returns track Japanese share prices rather than the currency.
• Costs 0.48% a year, a shade under the median for single-country Japan funds.
• About 400 holdings picked through a dividend screen rather than a straight market-cap list, with cash paid out quarterly.
• A multi-billion-dollar fund and one of the easier names in its Japan peer group to move in and out of.

• SCJ One job, done tightly: it tracks the MSCI Japan Small Cap Index, roughly 800 names deep, the part of the market big blue-chip Japan benchmarks leave on the floor.ishares.com
• Trading since 2007, so there is a long live record here, not a backtest, and it has stayed tight to its index over that stretch.
• About 800 holdings means no single stock carries the portfolio, and the 0.50% fee sits right at the median for single-country Japan funds.

Worth knowing

• DXJ Hedging cuts both ways. If the yen strengthens against the dollar, you give up the lift an unhedged Japan fund would collect.
• Cheaper hedged Japan exposure exists: FLJH runs at 0.09%.
• The dividend screen means this won't mirror a standard Japan market-cap index, so sector and company weights sit differently.

• SCJ 0.50% a year is the going rate for the niche, but broad Japan trackers like FLJP (0.09%) and BBJP (0.19%) charge a fraction. Small-cap coverage is the upcharge.
• Moderately traded, and Tokyo is closed while US markets are open, so spreads and price-to-value gaps can widen at the edges of the session.
• Unhedged: the holdings are priced in yen, so currency swings land on top of the stock moves, in both directions. Distributions come once or twice a year.ishares.com

Full DXJ profile⁠

Full SCJ profile⁠