Investors Show Faith In Japan’s Ability To Recover As ETFs Attract Record Inflows

Thursday, March 24, 2011 05:59
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Investors Show Faith In Japan’s Ability To Recover As ETFs Attract Record Inflows

Tags: ETFs

U.S. investors sent assets in Japanese equity exchange-traded funds to record heights last week as the nation struggled to deal with the aftermath of an earthquake, a tsunami and a nuclear crisis.

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Barring a catastrophic worsening of the nation’s nuclear woes, many market strategists believe the disaster will have only a temporary effect on world markets. Most analysts point out that markets generally recover quickly from major catastrophes, citing the Kobe earthquake in 1995 and the Sept. 11, 2001, terror attacks in New York City as examples.


U.S. investors sent $1.2 billion into Japanese ETFs last week, the biggest inflow on record. The Nikkei 225 Index remains down 9% since the earthquake hit, so investors saw a buying opportunity based on confidence the Japanese will rebuild their economy and the market will rebound.


MarketWatch columnist Jeff Reeves offers another take on investing in Japan and other trouble spots worldwide. He suggests investing in Hitachi Ltd., a Japanese that had achieved a dramatic turnaround in profit in the year before the quake hit.

 

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