EWJ vs FLJH

EWJAiShares MSCI Japan ETF

FLJHAFranklin FTSE Japan Hedged ETF

In short

EWJ The 1996 original. iShares' Japan fund was the default way to own Tokyo's biggest names before most of its rivals existed, and it still trades like it: roughly 170 large and mid-cap stocks, yen exposure unhedged.

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

EWJ The fund seeks to track an index of Japanese equities, providing targeted exposure to companies in Japan.

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

• EWJ Launched in 1996 and still one of the most heavily traded funds in the Japan category, which generally means tight spreads and room to trade size.
• Tracks the MSCI Japan Index closely, holding roughly 170 large and mid-cap Japanese companies.
• A multi-billion-dollar iShares fund: the kind of scale and sponsorship that keeps a product well supported.

• 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

• EWJ Cheaper Japan beta exists. FLJP charges 0.09% and BBJP 0.19% against this fund's 0.49%. The extra fee buys the liquidity and the long record.
• No currency hedge here, so yen moves against the dollar flow straight into the return, up or down. Hedged Japan funds such as FLJH take the other approach.
• One country, roughly 170 names, and cash comes back only once or twice a year rather than quarterly.

• 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 EWJ profile⁠

Full FLJH profile⁠