Let’s analyze the top ETFs for the first quarter of 2024. Japan and Italy stand out among the best countries.
Funds and ETFs with a focus on Japan and Italy posted significant returns of 12% and 10.7% respectively in the last quarter. These markets, traditionally perceived as more mature and with fewer opportunities for rapid growth, have benefited from specific conditions that have allowed them to emerge as attractive to investors. In Japan, the continued stock market growth, which has hit new highs, has raised questions about whether to maintain exposure amid potential overvaluation.
On the contrary, in Italy, the banking and financial sector has shown a particular liveliness, pushing the national stock market to confirm itself as one of the best performing globally. These results reiterate the importance of a diversified investment strategy that is attentive to the specific dynamics of each market.
In the context of increasing globalization of investments, Exchange-Traded Funds (ETFs) represent an effective solution for diversifying portfolios with targeted exposure to specific national markets. The following analysis focuses on ETFs that replicate benchmark indices in Italy and Japan, offering a comparative overview of the different options available to investors.
Italian ETFs: Amundi FTSE MIB UCITS ETF Acc vs Xtrackers FTSE MIB UCITS ETF 1D
The Amundi FTSE MIB UCITS ETF Acc and the Xtrackers FTSE MIB UCITS ETF 1D are both financial instruments that aim to replicate the FTSE MIB index, which includes the 40 largest Italian companies by market capitalization.
The Amundi ETF, with assets under management of just 4 million euros, has a total cost (TER) of 0.35% per year and adopts a dividend accumulation strategy. Launched in 2021, this fund is tax-domiciled in France.
In contrast, the Xtrackers FTSE MIB UCITS ETF 1D, with assets under management of around 57 million and a slightly lower TER of 0.30% per annum, is positioned as a cheaper and larger option than its competitor Amundi. This ETF pays dividends annually, a feature that could appeal to investors interested in regular income streams. Launched in 2007 and with a tax domicile in Luxembourg, Xtrackers offers a longer history and potentially more stability given its larger size.
The direct comparison between these two Italian ETFs reveals significant differences in terms of dividend management and costs, thus influencing investors’ choice depending on their priorities, such as the desire for automatic reinvestment of dividends or the preference for a regular distribution of the same.
Japanese ETFs: WisdomTree Japan Equity UCITS ETF USD Hedged vs Xtrackers MSCI Japan UCITS ETF 2D USD Hedged
Turning to the Japanese market, the WisdomTree Japan Equity UCITS ETF USD Hedged and the Xtrackers MSCI Japan UCITS ETF 2D USD Hedged both offer hedged exposure to Japanese equities, but follow different indexes with distinct approaches to stock selection and dividend distribution.
The WisdomTree ETF tracks the WisdomTree Japan Equity (USD Hedged) index, which includes Japanese stocks selected according to ESG criteria and weighted based on fundamental data. With a TER of 0.48%, this ETF pays dividends semi-annually and has assets under management of €57 million. Launched in 2015 and domiciled in Ireland, it offers an investment approach focused on sustainability and solid financial criteria.
Instead, the Xtrackers MSCI Japan UCITS ETF 2D USD Hedged tracks the MSCI Japan (USD Hedged) index, covering a broader range of major Japanese market stocks with a slightly lower TER of 0.40%. This fund, which has assets under management of 28 million euros and also distributes dividends annually, was launched in 2013 with a tax domicile in Luxembourg. This ETF’s full physical replication approach could be particularly attractive to investors seeking strict fidelity to the benchmark index.
Conclusion
In both the Italian and Japanese markets, ETFs offer different ways of economic participation and dividend management, with different impacts on investment decisions depending on the tax context, reinvestment strategy, and investors’ personal preferences. While Italian ETFs highlight differences in dividend treatment and costs, Japanese ETFs stand out for their approach to sustainable investment and hedging of exchange rate risk, crucial elements for making informed decisions in an increasingly globalized and interconnected.
| Disclaimer The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to public savings. |
Original article published on Money.it Italy 2024-04-29 09:46:33. Original title: I migliori ETF nel primo trimestre 2024: Giappone e Italia sul podio
