Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Investing in Japan: Record $956 million flows in

Japanese ETFInvestors found plenty of buying opportunity as the Nikkei tanked. Click chart for more on the ETF. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney) -- Investors plowed a record amount of cash into funds that invest in Japanese equities this week, taking full advantage of a sharp drop in the Nikkei following the disaster in Japan.

A whopping $956 million flowed into U.S.-based Japanese equity mutual funds and exchange traded funds in the week ended March 16, according to data from Thomson Reuters Lipper service.

A hefty chunk of that fresh cash went into Japanese stock ETFs, which accounted for nearly 98%, or $936 million, of the total amount. That's the best weekly inflow on record, and almost twice the prior record set in November 2005, said Jeff Tjornrhoj, head of Lipper Americas Research.

The iShares MSCI Japan Index Fund (EWJ), the biggest Japanese tracking ETF, enjoyed the biggest boost.

On Tuesday alone, investors injected $692 million into the fund, whose top holdings include the Japanese-traded shares of Toyota, Honda, Mitsubishi, Canon, Sony and Tokyo Electric Power Co. That was the largest single-day inflow on record for the ETF, according to TrimTabs Investment Research.

It was also the same day the Nikkei 225 (NKY) index, the most prominent measure of stocks traded in Tokyo, dropped more than 10%.

"A lot of investors who have been watching the Japanese market with the intent to invest are viewing this dip in the market as the best time to get in since the financial crisis in 2008," said Minyi Chen, Asia equity analyst at TrimTabs.

That's exactly what the manager of the YieldQuest Core Equity Fund (YQCEX) did. YieldQuest chief investment strategist Jay Chitnis boosted the fund's allocation in the iShares MSCI Japan Index Fund to 10% from 6%, in the days following the earthquake.

"These sorts of events present a terrific buying opportunity in hindsight," Chitnis said. And since the Group of Seven nations pledged to intervene to stabilize the yen late Thursday, Chitnis expects Japanese stocks to deliver an even better performance than before.

"Japan is a huge export economy, and they've had to contend with a strong yen," he said. "If the yen weakens, that will make Japanese goods even more attractive in world markets, and that will be tremendous for Japanese companies' earnings."

Plus, experts are optimistic that the earthquake's impact will have a relatively mild long-term effect on the Japanese and global economies.

"Once the nuclear power plants situation is under control, the market will recover quickly, said TrimTabs' Chen. After bottoming on Tuesday, the Nikkei has climbed almost 7%.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.93%4.14%
15 yr fixed3.03%3.14%
5/1 ARM3.32%3.28%
30 yr refi4.02%4.21%
15 yr refi3.11%3.21%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,751.49 5.51 0.03%
Nasdaq 5,144.03 15.24 0.30%
S&P 500 2,111.64 3.01 0.14%
Treasuries 2.20 -0.07 -3.09%
Data as of 11:25am ET
Company Price Change % Change
Bank of America Corp... 17.98 -0.14 -0.80%
Facebook Inc 95.76 0.55 0.58%
Apple Inc 121.28 -1.09 -0.89%
Micron Technology In... 19.16 -0.74 -3.72%
Exxon Mobil Corp 79.74 -3.27 -3.94%
Data as of 11:10am ET

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More