🤝 BFF Take
Depends on Your Yen View — HEWJ Removes Currency Noise, EWJ Is Simpler
EWJ (iShares MSCI Japan ETF) and HEWJ (iShares Currency Hedged MSCI Japan ETF) hold essentially the same Japanese equity portfolio — Toyota, Sony, Keyence, SoftBank, and similar major Japanese companies. The difference is currency treatment: EWJ gives you Japanese yen exposure alongside the equity returns, while HEWJ uses rolling one-month FX forwards to hedge out the yen, delivering only the local equity return in USD. When the yen weakens against the dollar (as it did dramatically in 2022-2023), HEWJ significantly outperforms EWJ because hedged investors don't lose money on the currency translation. When yen strengthens, EWJ wins. Both charge similar fees (~0.50%). The choice is essentially a yen view: neutral or bullish on yen → EWJ; bearish or wanting pure equity exposure → HEWJ.
📋 Quick Takeaways
🇯🇵Both hold the same Japanese stocks — Toyota, Sony, Keyence, Mitsubishi, SoftBank — same equity exposure
💴EWJ includes yen currency risk; HEWJ hedges it out — your yen view is the entire decision
💰HEWJ costs 0.48% vs EWJ's 0.50% — hedging cost is embedded in the FX forwards, not the expense ratio
📊 Data-Based Take: HEWJ has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
EWJ
iShares MSCI Japan ETF
HEWJ
iShares Currency Hedged MSCI Japan ETF
📋 EWJ vs HEWJ — Key Facts Side by Side
| Metric |
EWJ |
HEWJ |
| Fund Name |
iShares MSCI Japan ETF |
iShares Currency Hedged MSCI Japan ETF |
| Issuer |
iShares |
iShares |
| Tracks Index |
MSCI Japan |
MSCI Japan (USD Hedged) |
| Expense Ratio |
0.50% |
0.48% ✓ |
| Cost per $10K/yr |
$50.00 |
$48.00 |
| AUM |
$10B |
$4B |
| Holdings |
240 |
240 |
| Inception |
1996 |
2014 |
| 1-Year Return |
+2.40% |
+10.20% |
| 3-Year Return |
+2.80% |
+8.40% |
| 5-Year Return |
+5.60% |
+10.80% |
| Avg Bid-Ask Spread |
0.01% |
0.03% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 EWJ vs HEWJ — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy EWJ or HEWJ?
Choose if...
EWJ
- You already use iShares and prefer staying within their fund family
Choose if...
HEWJ
- You want the lowest fees — saves ~$2/yr per $10K vs EWJ
- You already use iShares and prefer staying within their fund family
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❓ EWJ vs HEWJ — Frequently Asked Questions
Should I buy EWJ or HEWJ?
The answer depends entirely on your view of the Japanese yen. If you believe the yen will strengthen vs the dollar (historically likely after extended weakness), EWJ will benefit from currency tailwinds. If you believe the yen will remain weak or decline further, HEWJ protects you from currency drag. If you have no strong yen view and just want Japanese equity exposure without currency noise, HEWJ provides a "purer" Japan equity return in USD terms.
How much did yen weakness hurt EWJ investors?
Significantly. The yen weakened from roughly 110 ¥/$ in 2021 to 155 ¥/$ by 2024 — a ~30% depreciation. Japanese stocks in local terms performed well during this period, but EWJ investors saw those gains partially erased by the currency translation loss. HEWJ investors captured the full local equity return. The yen depreciation was one of the clearest examples of why currency hedging matters for international investing.
What does currency hedging actually cost?
The stated expense ratios for EWJ (0.50%) and HEWJ (0.48%) are similar, but HEWJ has an embedded hedging cost from rolling FX forwards. This cost varies with interest rate differentials — when US rates are higher than Japanese rates (as in 2022-2024), the cost of hedging yen to USD is actually negative (you receive the interest rate differential). This made HEWJ particularly attractive in recent years. The true all-in cost of hedging fluctuates with rate differentials.
Is Japan a good investment right now?
Japan has attracted significant institutional attention due to corporate governance reforms pushed by the Tokyo Stock Exchange — companies are being pressured to improve capital efficiency, buy back shares, and increase dividends. Japanese equities trade at lower valuations than US stocks. Warren Buffett's investment in Japanese trading houses (sogo shosha) highlighted the value opportunity. Risks include yen volatility, demographic headwinds, and global trade exposure. EWJ/HEWJ provide easy access to this thesis.
Are there other Japan ETF options besides EWJ and HEWJ?
DXJ (WisdomTree Japan Hedged Equity ETF, 0.48%) is a popular alternative that is hedged and also tilts toward export-oriented companies that benefit from yen weakness. EWJ's size makes it the most liquid Japan ETF. FLJP (Franklin FTSE Japan ETF, 0.09%) is dramatically cheaper but much less liquid. For most investors, EWJ or HEWJ's liquidity and options market depth outweigh the fee savings from smaller alternatives.
New to ETF investing? See answers to the most common ETF questions →
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.