Japanese Small-Cap Shares Come to Life

The dividends have been similar. The WisdomTree Fund has a trailing dividend yield of 2.02% versus 1.40% for the SPDR fund and 1.55% for the iShares ETF. The expense ratios range from 0.53% to 0.58%.

In addition to an enormous amount of debt, Japan has problems with an aging population and the need to import all of its oil. On the plus side, it's the world's second-largest economy, with a high-wage work force and well-educated population. It's difficult to make a bullish case for Japan but after two "lost decades," it's reasonable to believe that the country wants a change, as evidenced by the election result, and a newfound hope that a new party in charge cannot possibly do worse.

Small-cap ETFs allow investors to capitalize on that hope. Of the three ETFs, the iShares fund could come out on top if the DPJ is successful with its agenda. If it can make the Japanese consumer healthier, it stands to reason that this could mean good things for the financial sector.

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