WisdomTree Chief Investment Officer Jeremy Schwartz spoke with Benzinga about the unparalleled potential nestled within Japan’s economic landscape.

What Happened: Benzinga asked Schwartz which country’s economy the ETF provider views as the most promising.

Japan, said Schwartz, which has investment appeal largely due to its transformative “new corporate culture.”

A seismic shift toward shareholder-friendly practices characterizes the nation, he added.

Schwartz also pointed to the growing cohort of Japanese companies embracing shareholder value maximization through increased dividends and buybacks — a testament to a newfound commitment to investor returns.

See the chart below.

Chart: Benzinga Pro

Buffett Is Bullish On Japan, Too

Central to Japan’s investment appeal is a resounding endorsement from Warren Buffett.

The so-called “Oracle of Omaha” has unreservedly declared Japan as the premier destination for deploying fresh capital outside of the U.S.

Buffett has directed investments into five distinct Japanese trading companies in a strategic move indicative of Japan’s attractiveness. The move underscores his unwavering confidence in the nation’s economic trajectory.

Moreover, Buffett’s endorsement serves as a compelling catalyst for foreign investors, reigniting interest and revitalizing confidence in Japan’s market potential.

As foreign capital flows back into the country, Japan emerges as a magnet for investors seeking to capitalize on its growing opportunities.

Related: Warren Buffett’s Berkshire Hathaway Raises Stake In 5 Japanese Trading Houses

WisdomTree ETF Has A Similar Approach To Buffett

Navigating Japan’s investment landscape presents unique challenges, notably the Japanese yen’s volatility.

According to Schwartz, “it is impossible to predict the direction of the yen.”

In response, Buffett has adopted a prudent approach. He neutralizes exchange rate risk by issuing yen-denominated bonds — an astute strategy to safeguard investments against currency fluctuations.

Enter the WisdomTree Japan Hedged Equity ETF DXJ. The ETF seeks to harness the power of currency hedging to mitigate exchange rate volatility and amplify returns.

The appeal of the ETF lies not only in its strategic hedging mechanisms but also in its compelling value proposition, Schwartz told Benzinga. By earning the carry in hedging instruments — a substantial margin bolstered by the disparity between U.S. and Japan interest rates — the ETF offers investors an avenue to capitalize on Japan’s economic resurgence while neutralizing FX risk.

The WisdomTree Japan Hedged Equity ETF has witnessed a remarkable growth trajectory — up 47% over the past year and 21% YTD. The fund’s investment strategy leverages Japan’s newfound corporate ethos.

Other Japan-focused ETFs such as the iShares MSCI Japan ETF EWJ and the JPMorgan BetaBuilders Japan ETF BBJP are also up 4.96% and 5.41%, respectively.

Japan stands at the precipice of a new era — a paradigm shift marked by a revitalized corporate culture and a resolute commitment to shareholder value maximization. For investors seeking to capitalize on this transformative journey, Japan could represent a golden opportunity.

Read Next: Invest For The Decades, Not The Years

Image: Shutterstock