How to invest in Japan using ETFs
How do I invest in Japanese stocks?
The easiest way to invest in the whole Japanese stock market is to invest in a broad market index. This can be done at low cost by using ETFs.
On the Japanese stock market you'll find 7 indices which are tracked by ETFs. Besides these indices 6 alternative indices on small and mid caps or equity strategies can be considered.
A speciality for ETFs on Japan is the large number of currency hedged ETFs that are available. In total there are 8 currency hedged indices tracked by 12 ETFs.
Performance of Japanese stocks (MSCI Japan)
1 month: 7.05%
1 year: 15.33%
3 years: 18.11%
5 years: 32.95%
Indices in comparison
The best indices for ETFs on Japan
For an investment in the Japanese stock market, there are 7 indices available which are tracked by 22 ETFs. On the FTSE Japan index there are 3 ETFs. On the JPX-Nikkei 400 index there are 2 ETFs. On the MSCI Japan index there are 10 ETFs. On the MSCI Japan IMI index there is 1 ETF. On the Nikkei 225® index there are 2 ETFs. On the Solactive GBS Japan Large & Mid Cap index there are 2 ETFs. On the TOPIX® index there are 2 ETFs. The total expense ratio (TER) of ETFs on these indices is between 0.05% p.a. and 0.48% p.a..
| Index | Investment focus | Number of ETFs | Number of constituents | Short description |
|---|---|---|---|---|
FTSE Japan | Japan | 3 ETFs | 515 (31/08/2023) | The FTSE Japan index tracks Japanese large and mid cap stocks. Index factsheet |
JPX-Nikkei 400 | Japan | 2 ETFs | 400 | The JPX-Nikkei 400 index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Index factsheet |
MSCI Japan | Japan | 10 ETFs | 198 (30/09/2024) | The MSCI Japan index tracks leading Japanese stocks. Index factsheet |
MSCI Japan IMI | Japan | 1 ETF | 1,088 (31/08/2023) | The MSCI Japan IMI index tracks stocks from Japan. It covers securities across large, mid and small cap size segments. Index factsheet |
Nikkei 225® | Japan | 2 ETFs | 225 | The Nikkei 225® index tracks the 225 most actively traded stocks on the first section of the Tokyo Stock Exchange. Index factsheet |
Solactive GBS Japan Large & Mid Cap | Japan | 2 ETFs | 330 (31/08/2023) | The Solactive GBS Japan Large & Mid Cap index tracks large and mid-cap securities from Japan. Index factsheet |
TOPIX® | Japan | 2 ETFs | 2,159 (31/08/2023) | The TOPIX® index tracks a broad selection of Japanese stocks listed on the TSE First Section segment of Tokyo Stock Exchange. Index factsheet |
| ETF ISIN | Fund size in m GBP | TER in % | Use of profits | Fund domicile | Replication method | |
|---|---|---|---|---|---|---|
| iShares Core MSCI Japan IMI UCITS ETFIE00B4L5YX21 | 4,204 | 0.12% p.a. | Accumulating | Ireland | Optimized sampling | |
| Amundi MSCI Japan UCITS ETF AccLU1781541252 | 2,776 | 0.12% p.a. | Accumulating | Luxembourg | Full replication | |
| Vanguard FTSE Japan UCITS ETF DistributingIE00B95PGT31 | 1,722 | 0.15% p.a. | Distributing | Ireland | Full replication | |
| Xtrackers MSCI Japan UCITS ETF 1CLU0274209740 | 1,658 | 0.12% p.a. | Accumulating | Luxembourg | Full replication | |
| Xtrackers Nikkei 225 UCITS ETF 1DLU0839027447 | 1,210 | 0.09% p.a. | Distributing | Luxembourg | Full replication | |
| Amundi Prime Japan UCITS ETF DR (D)LU1931974775 | 1,028 | 0.05% p.a. | Distributing | Luxembourg | Full replication | |
| iShares MSCI Japan UCITS ETF (Dist)IE00B02KXH56 | 942 | 0.12% p.a. | Distributing | Ireland | Optimized sampling | |
| Vanguard FTSE Japan UCITS ETF AccumulatingIE00BFMXYX26 | 688 | 0.15% p.a. | Accumulating | Ireland | Full replication | |
| UBS ETF (LU) MSCI Japan UCITS ETF (JPY) A-disLU0136240974 | 590 | 0.12% p.a. | Distributing | Luxembourg | Full replication | |
| iShares MSCI Japan UCITS ETF USD (Acc)IE00B53QDK08 | 549 | 0.12% p.a. | Accumulating | Ireland | Full replication | |
| SPDR MSCI Japan UCITS ETFIE00BZ0G8B96 | 500 | 0.12% p.a. | Accumulating | Ireland | Optimized sampling | |
| Amundi Japan TOPIX II UCITS ETF EUR DistFR0010245514 | 358 | 0.45% p.a. | Distributing | France | Full replication | |
| iShares Nikkei 225 UCITS ETF (Acc)IE00B52MJD48 | 266 | 0.48% p.a. | Accumulating | Ireland | Full replication | |
| Amundi Prime Japan UCITS ETF DR (C)LU2089238385 | 162 | 0.05% p.a. | Accumulating | Luxembourg | Full replication | |
| HSBC MSCI Japan UCITS ETF USDIE00B5VX7566 | 133 | 0.12% p.a. | Distributing | Ireland | Full replication | |
| Amundi Japan Topix UCITS ETF JPYLU1681037781 | 123 | 0.20% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| Invesco JPX-Nikkei 400 UCITS ETFIE00BPRCH686 | 96 | 0.19% p.a. | Accumulating | Ireland | Unfunded swap | |
| Xtrackers MSCI Japan UCITS ETF 1DLU2581375230 | 53 | 0.12% p.a. | Distributing | Luxembourg | Full replication | |
| Amundi JPX Nikkei 400 UCITS ETF JPYLU1681039050 | 30 | 0.18% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| Invesco MSCI Japan UCITS ETF AccIE00B60SX287 | 9 | 0.12% p.a. | Accumulating | Ireland | Unfunded swap | |
| Franklin FTSE Japan UCITS ETF (Acc)IE000D0T0BO1 | 6 | 0.09% p.a. | Accumulating | Ireland | Full replication | |
| HSBC MSCI Japan UCITS ETF USD (Acc)IE0006RFB3X2 | 1 | 0.12% p.a. | Accumulating | Ireland | Full replication |
| Index | 1 month in % | 3 months in % | 6 months in % | 1 year in % | 3 years in % | |
|---|---|---|---|---|---|---|
| TOPIX® | 2.11% | -1.22% | 2.09% | 10.72% | 14.06% | |
| MSCI Japan | 2.41% | -0.85% | 2.41% | 12.08% | 14.84% | |
| FTSE Japan | 2.90% | 0.01% | 3.22% | 12.64% | 16.63% | |
| MSCI Japan IMI | 3.13% | 0.21% | 3.69% | 12.65% | 15.71% | |
| Solactive GBS Japan Large & Mid Cap | 3.59% | -0.04% | 3.50% | 12.86% | 16.58% | |
| Nikkei 225® | 1.52% | -0.10% | 5.64% | 13.35% | 13.99% | |
| JPX-Nikkei 400 | 3.45% | -0.38% | 3.68% | 13.61% | 17.63% |
| Index | 2024 in % | 2023 in % | 2022 in % | 2021 in % | 2020 in % | |
|---|---|---|---|---|---|---|
| TOPIX® | 6.96% | 12.23% | -5.65% | 1.52% | 8.29% | |
| MSCI Japan IMI | 8.28% | 12.41% | -6.02% | 2.15% | 9.98% | |
| FTSE Japan | 8.39% | 13.06% | -5.73% | 2.33% | 10.37% | |
| MSCI Japan | 8.52% | 13.25% | -7.01% | 2.85% | 11.09% | |
| Nikkei 225® | 9.17% | 15.05% | -9.99% | -3.61% | 20.83% | |
| Solactive GBS Japan Large & Mid Cap | 9.31% | 13.03% | -5.95% | 2.81% | 10.65% | |
| JPX-Nikkei 400 | 9.31% | 12.79% | -5.33% | 1.39% | 10.22% |
Source: justETF.com; As of 30/11/2024; Calculations in GBP based on the largest ETF of the respective index.
The best Japan ETFs
by 1 year return
| 1 | Invesco JPX-Nikkei 400 UCITS ETF | 13.61% |
| 2 | HSBC MSCI Japan UCITS ETF USD (Acc) | 13.54% |
| 3 | Xtrackers Nikkei 225 UCITS ETF 1D | 13.35% |
The cheapest Japan ETFs
by total expense ratio (TER)
| 1 | Amundi Prime Japan UCITS ETF DR (C) | 0.05% p.a. |
| 2 | Amundi Prime Japan UCITS ETF DR (D) | 0.05% p.a. |
| 3 | Franklin FTSE Japan UCITS ETF (Acc) | 0.09% p.a. |
Japan ETFs with hedged currency risk
Currency hedged investing in Japanese stocks is popular. In total, you can consider 8 currency hedged Japan indices tracked by 12 ETFs. The total expense ratio (TER) of ETFs on Japan indices with currency hedge is between 0.15% p.a. and 0.64% p.a..
| Index | Investment focus | Number of ETFs | Number of constituents | Short description |
|---|---|---|---|---|
| FTSE Japan (USD Hedged) | Japan | 1 ETF | 507 (30/07/2021) | The FTSE Japan (USD Hedged) index tracks Japanese large and mid cap stocks. Currency hedged to US-Dollar (USD). Index factsheet |
| JPX-Nikkei 400 (GBP Hedged) | Japan | 1 ETF | 400 | The JPX-Nikkei 400 (GBP Hedged) index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Currency hedged to British Pound (GBP). Index factsheet |
| JPX-Nikkei 400 (USD Hedged) | Japan | 2 ETFs | 400 | The JPX-Nikkei 400 Daily (USD Hedged) index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Currency hedged to US dollar. Index factsheet |
| MSCI Japan (EUR Hedged) | Japan | 1 ETF | 237 (30/11/2022) | The MSCI Japan (EUR Hedged) index tracks leading stocks on the Japanese market. Currency hedged to Euro (EUR). Index factsheet |
| MSCI Japan (GBP Hedged) | Japan | 3 ETFs | 272 (30/07/2021) | The MSCI Japan (GBP Hedged) index tracks around 320 leading stocks on the Japanese market. Currency hedged to British Pounds (GBP). Index factsheet |
| MSCI Japan (USD Hedged) | Japan | 2 ETFs | 272 (30/11/2022) | The MSCI Japan (USD Hedged) index tracks leading stocks on the Japanese market. Currency hedged to US Dollar (USD). Index factsheet |
| TOPIX® (GBP Hedged) | Japan | 1 ETF | 2,188 (30/07/2021) | The TOPIX® (GBP Hedged) index tracks Japanese stocks on the TSE First Section segment of the Tokyo Stock Exchange, which comprises the largest market capitalisations. Currency hedged to British Pound (GBP). |
| TOPIX® (USD Hedged) | Japan | 1 ETF | The TOPIX® (USD Hedged) index tracks Japanese stocks on the TSE First Section segment of the Tokyo Stock Exchange, which comprises the largest market capitalisations. Currency hedged to US-Dollar (USD). |
| ETF ISIN | Fund size in m GBP | TER in % | Use of profits | Fund domicile | Replication method | |
|---|---|---|---|---|---|---|
| iShares MSCI Japan EUR Hedged UCITS ETF (Acc)IE00B42Z5J44 | 579 | 0.64% p.a. | Accumulating | Ireland | Optimized sampling | |
| iShares MSCI Japan USD Hedged UCITS ETF (Acc)IE00BCLWRG39 | 315 | 0.64% p.a. | Accumulating | Ireland | Optimized sampling | |
| iShares MSCI Japan GBP Hedged UCITS ETF (Acc)IE00B7XYN974 | 121 | 0.64% p.a. | Accumulating | Ireland | Optimized sampling | |
| Xtrackers MSCI Japan UCITS ETF 2D USD hedgedLU0927735406 | 119 | 0.40% p.a. | Distributing | Luxembourg | Full replication | |
| UBS ETF (LU) MSCI Japan UCITS ETF (hedged to GBP) A-disLU1169822340 | 75 | 0.15% p.a. | Distributing | Luxembourg | Full replication | |
| Vanguard FTSE Japan UCITS ETF USD Hedged AccIE00BFMXZJ56 | 45 | 0.20% p.a. | Accumulating | Ireland | Full replication | |
| Amundi JPX Nikkei 400 UCITS ETF Daily Hedged USDLU1681039217 | 41 | 0.18% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| Amundi Japan Topix UCITS ETF Daily Hedged USDLU1681037948 | 20 | 0.48% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| Lyxor Core MSCI Japan (DR) UCITS ETF - Daily Hedged to GBP - AccLU1781541682 | 9 | 0.20% p.a. | Accumulating | Luxembourg | Full replication | |
| Invesco JPX-Nikkei 400 USD Hedged UCITS ETFIE00BVGC6751 | 6 | 0.19% p.a. | Accumulating | Ireland | Unfunded swap | |
| Amundi Japan Topix UCITS ETF Daily Hedged GBPLU1681038086 | 5 | 0.48% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| Amundi JPX Nikkei 400 UCITS ETF Daily Hedged GBPLU1681039308 | 4 | 0.18% p.a. | Accumulating | Luxembourg | Unfunded swap |
| Index | 1 month in % | 3 months in % | 6 months in % | 1 year in % | 3 years in % | |
|---|---|---|---|---|---|---|
| MSCI Japan (EUR Hedged) | -1.41% | -1.20% | -2.27% | 14.13% | 49.58% | |
| TOPIX® (USD Hedged) | 1.00% | 3.90% | 0.62% | 18.51% | 70.90% | |
| TOPIX® (GBP Hedged) | -1.14% | -0.01% | 0.39% | 18.60% | 58.97% | |
| MSCI Japan (USD Hedged) | 1.16% | 4.22% | 0.83% | 19.78% | 70.70% | |
| MSCI Japan (GBP Hedged) | -1.03% | 0.23% | 0.62% | 19.83% | 58.14% | |
| JPX-Nikkei 400 (USD Hedged) | 0.85% | 3.23% | 0.59% | 19.84% | 73.87% | |
| FTSE Japan (USD Hedged) | 1.32% | 4.50% | 1.32% | 19.87% | 72.58% | |
| JPX-Nikkei 400 (GBP Hedged) | -1.30% | -0.67% | 0.34% | 19.91% | 61.64% |
| Index | 2024 in % | 2023 in % | 2022 in % | 2021 in % | 2020 in % | |
|---|---|---|---|---|---|---|
| MSCI Japan (EUR Hedged) | 13.58% | 29.07% | -0.06% | 4.74% | 13.67% | |
| TOPIX® (GBP Hedged) | 18.26% | 33.26% | -2.52% | 11.26% | 6.73% | |
| TOPIX® (USD Hedged) | 18.67% | 27.17% | 10.45% | 13.07% | 2.69% | |
| JPX-Nikkei 400 (GBP Hedged) | 19.54% | 34.00% | -2.54% | 11.33% | 8.39% | |
| MSCI Japan (GBP Hedged) | 19.83% | 33.09% | -3.73% | 11.94% | 9.27% | |
| JPX-Nikkei 400 (USD Hedged) | 19.95% | 27.89% | 10.48% | 13.16% | 4.35% | |
| MSCI Japan (USD Hedged) | 20.12% | 27.18% | 9.27% | 13.67% | 7.20% | |
| FTSE Japan (USD Hedged) | 20.13% | 27.27% | 10.01% | 14.29% | - |
Source: justETF.com; As of 30/11/2024; Calculations in GBP based on the largest ETF of the respective index.
Alternative investment opportunities
Japan indices on small and mid caps or equity strategies
Alternatively, you may invest in indices on small and mid caps or equity strategies. In total, you can invest in 6 alternative indices on Japan tracked by 7 ETFs. The total expense ratio (TER) of ETFs on these alternative indices is between 0.10% p.a. and 0.58% p.a..
| Index | Investment focus | Number of ETFs | Number of constituents | Short description |
|---|---|---|---|---|
| MSCI Japan ESG Screened | Japan Social/Environmental | 2 ETFs | 232 (30/11/2022) | The MSCI Japan ESG Screened index tracks Japanese companies. The index excludes companies that are involved in businesses related to thermal coal, controversial weapons, tobacco and other controversial industries. Index factsheet |
| MSCI Japan Low Carbon SRI Leaders | Japan Social/Environmental | 1 ETF | 113 (30/11/2022) | The MSCI Japan Low Carbon SRI Leaders index tracks large- and mid-cap securities from Japan. Only companies with low carbon emissions and a high ESG (environmental, social and governance) rating are considered. The parent index is the MSCI Japan. Index factsheet |
| MSCI Japan SRI Select Reduced Fossil Fuels | Japan Social/Environmental | 1 ETF | 52 (30/11/2022) | The MSCI Japan SRI Select Reduced Fossil Fuels index tracks Japanese stocks considering only companies with very high Environmental, Social and Governance (ESG) ratings relative to their sector peers, to ensure the inclusion of the best of class companies from an ESG perspective and avoiding companies incompatible with values screen or having exposure to fossil fuels through extraction and production activities, power generation activities or reserves ownership. The weight of each company is capped to 5%. Index factsheet |
| MSCI Japan Select ESG Screened | Japan Social/Environmental | 1 ETF | 229 (30/11/2022) | The MSCI Japan Select ESG Screened index tracks large and mid-cap securities of the Japanese equity markets. The stocks included are filtered according to ESG criteria (environmental, social and corporate governance). Excluded sectors and companies: weapons, tobacco, thermal coal, oil sands, non-compliance with UN Global Compact. Index factsheet |
| MSCI Japan Small Cap | Japan Small Cap | 1 ETF | 864 (30/09/2024) | The MSCI Japan Small Cap index tracks Japanese small cap stocks. Index factsheet |
| Solactive Core Japan Large & Mid Cap | Japan Social/Environmental | 1 ETF | 330 (30/11/2022) | The Solactive Core Japan Large & Mid Cap index tracks the Japanese market and measures the performance of large and mid-cap publicly traded which satisfy minimum criteria relating to liquidity and size and excludes companies: (a) engaged in pure coal mining; (b) involved in the production of controversial weapons, such as cluster weapons, anti-personnel mines or biological and chemical weapons; or (c) that, for a continuous period of three years, have been classified as being in breach of at least one of the UN Global Compact principles. Index factsheet |
| ETF ISIN | Fund size in m GBP | TER in % | Use of profits | Fund domicile | Replication method | |
|---|---|---|---|---|---|---|
| Xtrackers MSCI Japan ESG UCITS ETF 1CIE00BG36TC12 | 1,708 | 0.20% p.a. | Accumulating | Ireland | Full replication | |
| iShares MSCI Japan ESG Screened UCITS ETF USD (Acc)IE00BFNM3L97 | 1,109 | 0.15% p.a. | Accumulating | Ireland | Optimized sampling | |
| iShares MSCI Japan SRI UCITS ETF USD (Acc)IE00BYX8XC17 | 535 | 0.20% p.a. | Accumulating | Ireland | Full replication | |
| L&G Japan Equity UCITS ETFIE00BFXR5T61 | 352 | 0.10% p.a. | Accumulating | Ireland | Full replication | |
| iShares MSCI Japan ESG Screened UCITS ETF USD (Dist)IE00BFNM3M05 | 317 | 0.15% p.a. | Distributing | Ireland | Optimized sampling | |
| Xtrackers MSCI Japan ESG Screened UCITS ETF 1DIE00BPVLQD13 | 285 | 0.15% p.a. | Distributing | Ireland | Full replication | |
| iShares MSCI Japan Small Cap UCITS ETF (Dist)IE00B2QWDY88 | 214 | 0.58% p.a. | Distributing | Ireland | Optimized sampling |
| Index | 1 month in % | 3 months in % | 6 months in % | 1 year in % | 3 years in % | |
|---|---|---|---|---|---|---|
| MSCI Japan SRI Select Reduced Fossil Fuels | 2.55% | -1.40% | 5.42% | 10.16% | 4.44% | |
| MSCI Japan Small Cap | 4.47% | 1.62% | 6.83% | 10.78% | 11.94% | |
| MSCI Japan Select ESG Screened | 2.70% | -0.54% | 2.66% | 11.78% | 13.21% | |
| MSCI Japan ESG Screened | 2.52% | -0.38% | 2.52% | 12.34% | 14.29% | |
| Solactive Core Japan Large & Mid Cap | 3.11% | 0.36% | 4.06% | 13.95% | 17.64% | |
| MSCI Japan Low Carbon SRI Leaders | 2.73% | 0.16% | 8.99% | 18.08% | 12.73% |
| Index | 2024 in % | 2023 in % | 2022 in % | 2021 in % | 2020 in % | |
|---|---|---|---|---|---|---|
| MSCI Japan SRI Select Reduced Fossil Fuels | 5.62% | 7.01% | -8.44% | 2.44% | 12.47% | |
| MSCI Japan Small Cap | 5.85% | 6.89% | -2.06% | -1.50% | 3.55% | |
| MSCI Japan ESG Screened | 7.98% | 13.19% | -7.30% | 2.42% | 11.79% | |
| MSCI Japan Select ESG Screened | 8.19% | 12.46% | -7.33% | 2.00% | 10.73% | |
| Solactive Core Japan Large & Mid Cap | 9.84% | 13.25% | -6.21% | 2.77% | 10.72% | |
| MSCI Japan Low Carbon SRI Leaders | 12.11% | 11.84% | -10.92% | 0.24% | 15.12% |
Source: justETF.com; As of 30/11/2024; Calculations in GBP based on the largest ETF of the respective index.