ETF v praxi
VJPN (Vanguard FTSE Japan): ETF Review — Holdings, TER and Who It's For
Key takeaways
- VJPN tracks the FTSE Japan Index and covers over 500 Japanese large- and mid-cap stocks.
- Japan offers unique exposure to export-oriented industrial giants, the financial sector and technology.
- The approximate TER is around 0.15% per year; always verify the exact figure on justETF.
- Japanese yen currency risk is significant — the yen historically oscillates sharply against both the euro and the koruna.
- VJPN is suitable as a regional satellite for more experienced investors who deliberately bet on the Japanese market.
VJPN is a direct and low-cost way to add the Japanese equity market to a European portfolio. The Vanguard FTSE Japan ETF tracks an index covering over 500 companies in Japan — from global industrial giants through automotive conglomerates to global technology firms. Japan is the world's third-largest equity market, yet many European investors underweight it.
What the FTSE Japan Index contains
The FTSE Japan Index covers the large- and mid-cap segment of the Japanese market. Industrial conglomerates, automakers (Toyota, Honda), electronics (Sony, Keyence) and the banking sector dominate. The sectoral breakdown differs substantially from the US market — technology in the traditional sense is less represented, while industrials and consumer goods are stronger. This sectoral profile makes VJPN a natural diversification tool for portfolios overloaded with US tech.
Costs and fund structure
The approximate TER is around 0.15% per year. VJPN is an Irish UCITS ETF with an accumulating structure — dividends are reinvested automatically. It trades in euros on Euronext Amsterdam. Irish domicile provides advantageous dividend taxation under favourable tax treaties.
Currency risk — the Japanese yen can surprise
The yen is one of the most volatile major currencies. The Bank of Japan historically maintained an extremely loose monetary policy, which led to yen depreciation. Investing from the Czech Republic adds a double currency risk — yen/euro and euro/koruna. In years when the yen weakens significantly, the return in CZK can be substantially below the return in local currency.
Who is VJPN suitable for
- Investors with a global ETF who want to deliberately raise Japanese exposure above the standard market weight.
- Those betting on structural reforms at Japanese corporations and a return to shareholder-friendly policies.
- Investors diversifying sectorally — Japanese industrials and conglomerates are a unique exposure.
- Experienced investors prepared for yen currency volatility.
Risks and limitations of VJPN
Japan faces demographic decline, a relatively high public debt and deflationary pressures. Corporate culture is reforming, but slowly. Regional concentration means that if the Japanese market stagnates, VJPN will feel it entirely. For context, compare with All World vs. S&P 500 and browse the ETF overview for alternatives.
FAQ
Why is Japan underweighted in global ETFs?
Japan accounts for approximately 5–6% of MSCI World, while the US market dominates at 65%+. Global indices weight markets by market capitalisation, so Japan automatically receives a smaller share. VJPN allows investors to deliberately increase that share.
How large is the yen currency risk in practice?
The yen can fluctuate by 10–20% against the euro within a year. That means even a solid return from Japanese equities can be wiped out in euro terms by yen depreciation. Currency risk is more pronounced in VJPN than in European ETFs.
Is VJPN suitable for beginning investors?
Not really as a portfolio core. Regional concentration and significant currency risk make it a satellite position. Beginning investors should start with a global ETF — read <a data-go="#/clanek/jak-poskladat-prvni-portfolio">how to build a first portfolio</a>.