NEW YORK ( TheStreet) -- Although the devastating earthquake and tsunami that tore through Japan during the opening half of 201l cast a thick fog of uncertainty over the nation's markets, some of the doubts circling this nation have been lifted in recent weeks.As we move further into the second half of the year, Japan is showing signs that it is gathering steam and investors with a tolerance for risk may find this recovering corner of the globe to be an attractive option to keep on the radar. Evidence of Japan's increasing strength can be seen by comparing the recent performance of iShares MSCI Japan Index Fund ( EWJ) to that of broader global products such as the iShares MSCI EAFE Index Fund ( EFA) and the Vanguard Total World Stock ETF ( VT). Over the past 30 days, shares of EWJ have jumped nearly 3%. EFA and VT, meanwhile, have remained subdued, dipping over 5% and nearly 4% respectively. In recent commentary for ETFProfits, I noted that EWJ's standout performance in recent weeks has translated into an impressive rise in our short term momentum rankings. The fund's upward action has led to steady, albeit less dramatic, gains in our long term rankings as well. The near term action seen by EWJ bodes well for Japan's prospects. Looking ahead, it appears as though the nation's run is not over. Early Wednesday, it was announced that the nation's industrial output data for May had been revised higher to 6.2%, a welcomed increase to an already-strong initial reading of 5.7%. According to Reuters, this strong showing suggests that "the economy is on course for a rapid recovery following the massive earthquake in March." Investors looking to get a front row seat to the nation's resurgence will want to keep a close watch on broad Japan-tracking ETFs. Traditionally, iShares' EWJ has been the go-to product for investors looking to tap into the Japanese equity markets. Designed to track the performance of the MSCI Japan Index, the fund has gathered a massive following over its lifetime. According to the June ETF data compiled by the National Stock Exchange, EWJ currently boasts $7.2 billion in assets, placing it just shy of 30 largest ETFs.
EWJ's top holdings include Toyota ( TM), Honda Motor ( HMC) and Mitsubishi UFJ Financial Group. This week, the Japan-related ETF universe was expanded when Precidian Investments unveiled the MAXIS Nikkei 225 Index Fund ( NKY). The first U.S.-listed fund of its kind, NKY is designed to track the Nikkei 225 index. NKY's top three holdings include FANUC, Fast Retailing, and Softbank. Upon initial inspection, it is easy to uncover a number of differences that set NKY apart from the veteran EWJ. For instance, there are clear variations between the two funds' respective sector breakdowns. Most glaring is their focus on the financial industry. While, at nearly 17%, financials account for the third largest slice of EWJ's index, NKY sets aside only 6% of its assets to this industry. The allure of being able to track the Nikkei 225 may be enough to draw investors to NKY. However, Precidian appears to be hoping to get a leg up on the competition by appealing to cost-conscious investors as well. As I explained earlier this week, companies including Vanguard and Schwab ( SCHW) have taken the ax to expense ratios in hopes of boosting interest in their product lines. Taking a page out this book, Precidian is offering NKY for 0.50% -- a full 4 basis points below EWJ. Given the global popularity of the Nikkei 225 index, as well as fund's reduced expense ratio, there is a good chance that Precidian could have a hit on its hands with NKY. However, like any new product, I urge investors to stick to the sidelines until the fund gathers steam. On more than one occasion I have seen ETFs that show promise run into trouble due to lack of investor interest. Japan is showing solid signs of improvement and could be in for some impressive strength in the months ahead. Investors looking to jump in now should turn to EWJ. The newly launched NKY may become a force to be reckoned with down the road but ultimately should be kept at an arm's length until it can solidify its place within the ETF universe. Written by Don Dion in Williamstown, Mass.