iShares MSCI Japan Small-Cap ETF (SCJ)

Overview

The iShares MSCI Japan Small-Cap ETF (SCJ) seeks to track the investment results of an index composed of small-capitalization Japanese equities, offering exposure to a segment of the Japanese market beyond large-cap companies. It provides diversification within the Japanese equity market and targets smaller, potentially high-growth companies.

Reputation and Reliability

BlackRock is a leading global asset manager with a strong reputation and long track record of managing ETFs.

Management Expertise

BlackRock has extensive experience and expertise in managing a wide range of ETFs, including international and small-cap focused funds.

Goal

To track the investment results of an index composed of small-capitalization Japanese equities.

Investment Approach and Strategy

Strategy: The ETF employs a passive management strategy, attempting to replicate the performance of the MSCI Japan Small Cap Index.

Composition The ETF holds a portfolio of small-cap Japanese stocks across various sectors, providing diversified exposure to the Japanese small-cap market.

Market Share: iShares MSCI Japan Small-Cap ETFu2019s market share in its sector is substantial but not dominant, with several competitors offering similar exposure.

Total Net Assets (AUM): 692840000

Key Competitors

• WisdomTree Japan SmallCap Dividend Fund (DFJ)
• First Trust Japan AlphaDEX Fund (FJP)
• JPMorgan BetaBuilders Japan ETF (BBJP)

Competitive Landscape

The competitive landscape includes ETFs with similar objectives but different weighting methodologies. SCJ's advantage lies in its large AUM and tight tracking of the MSCI index. Disadvantages may include its market cap weighting approach potentially leading to concentration in certain sectors compared to dividend or fundamental-weighted competitors.

Historical Performance: Historical performance data is available through various financial data providers and shows fluctuations in line with the Japanese small-cap market. Performance data should be checked for updated numbers.

Benchmark Comparison: The ETF's performance should closely track the MSCI Japan Small Cap Index. Deviations may occur due to expense ratios and tracking errors.

Expense Ratio: 0.0029

Average Trading Volume

The average trading volume of SCJ indicates moderate liquidity, sufficient for most retail investors.

Bid-Ask Spread

The bid-ask spread is typically narrow, reflecting the ETF's relatively high trading volume and efficient market making.

Market Environment Factors

Economic growth in Japan, currency fluctuations (USD/JPY), and global market sentiment all affect SCJ. Furthermore, changes in Japanese government policies and international trade relationships have an effect.

Growth Trajectory

Growth trends depend on the overall performance of the Japanese economy and the attractiveness of small-cap Japanese equities to international investors. Future changes in strategy or holdings would be communicated through fund prospectuses.

Competitive Edge

SCJ's competitive advantages include its large AUM, established track record, and the backing of BlackRock, a well-known and trusted ETF provider. Its focus on small-cap Japanese equities provides exposure to a potentially high-growth segment of the market. The ETF's objective and index replication strategy leads to a high level of transparency. The low expense ratio also offers a competitive advantage compared to similar ETFs.

Volatility

The ETF's volatility is likely to be higher than broader Japan ETFs due to its focus on small-cap stocks, which tend to be more volatile.

Market Risk

Specific risks include currency risk (JPY/USD exchange rate), economic slowdown in Japan, and potential underperformance of small-cap stocks relative to large-cap stocks.

Ideal Investor Profile

Investors seeking exposure to the Japanese small-cap market as part of a diversified international equity portfolio are an ideal investor.

Market Risk

The ETF is suitable for long-term investors with a moderate to high risk tolerance looking to diversify their portfolio with exposure to Japanese small-cap equities.

The iShares MSCI Japan Small-Cap ETF (SCJ) offers targeted exposure to small-capitalization Japanese equities. It provides diversification within the Japanese market and allows investors to participate in the potential growth of smaller companies. As with any investment, investors should be aware of the risks involved, including currency risk and the inherent volatility of small-cap stocks. Due to backing from BlackRock and an established trading history, SCJ is a commonly used vehicle for accessing this segment of the Japanese equity market. Investors should weigh the low expense ratio with their portfolio diversification goals and risk appetite before investing.

• DFJ
• FJP
• EWJ
• DXJ

Data Sources:

• iShares official website
• MSCI Index data
• Financial data providers (e.g., Bloomberg, Reuters)
• ETF.com

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.