“It’s a game changer,” Steve Blumenthal, CEO of CMG Capital Management Group, told Investor’s Businsess Daily in the story Three Best Reasons To Invest In The Currency-Hedging ETFs.
Blumenthal was referring to Friday’s news that the Bank of Japan is massively scaling up its bond-buying program. Both the nation’s central bank and its state pension fund also plan to buy domestic and foreign stocks.
This injection of liquidity, Steve added, should inflate Japanese equity prices aggressively, similar to what multiple spells of quantitative easing did for U.S. stocks in the past six years or so. Excerpt from the story:
It’s a shot in the arm for Japan’s perennially listless economy. But the stimulus makes for a bearish outlook on the Japanese currency. For U.S. investors, a weakening yen could significantly erode returns on their investments in that nation.
Fortunately, there’s a simple way for people to get exposure to Japan but mitigate risk of the dollar’s potential rise against the yen: exchange traded funds. Several hedged ETFs let investors buy a rally in Japanese stocks without getting hit on currency moves.
“It’s double bang for the buck,” said Blumenthal, who invests in WisdomTree Japan Hedged Equity (ARCA:DXJ), up 6% so far in 2014.
Read to story in Investor’s Business Daily: Three Best Reasons To Invest In The Currency-Hedging ETFs
Previous IBD stories including Steve Blumenthal in 2014: