The Lazard Japanese Equity ETF (JPY) seeks to provide investment results that correspond to the performance of Japanese equity securities. This country-focused ETF targets publicly traded companies domiciled in Japan, offering U.S. investors exposure to the world's third-largest equity market.
How It Works
JPY employs an actively managed approach to select Japanese stocks based on Lazard's fundamental research and valuation analysis. The fund focuses on companies with strong competitive positions, sustainable business models, and attractive risk-adjusted return potential. Portfolio construction emphasizes quality companies across various market capitalizations and sectors within Japan's equity universe. Currency exposure remains unhedged, meaning returns fluctuate with yen-to-dollar exchange rates.
Key Features
- Active management by Lazard's experienced Japanese equity team with deep local market knowledge and research capabilities
- Unhedged currency exposure provides full participation in yen appreciation while adding foreign exchange risk
- Recently launched fund with 0.00% expense ratio, though this promotional rate may increase over time
Risks
- This ETF can lose significant value during Japanese market downturns, potentially declining 20-30% during regional economic stress or global risk-off periods
- Currency risk means returns fluctuate with yen strength—dollar appreciation versus yen reduces returns for U.S. investors regardless of stock performance
- Active management risk exists as fund performance depends on manager stock selection, which may underperform passive Japanese market benchmarks
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for investors with 3+ year time horizons seeking Japanese market exposure. Medium-to-high risk tolerance required due to single-country concentration and currency volatility. Appeals to investors wanting active management over passive index exposure to Japan's equity market.