This single-country ETF tracks the FTSE Japan Index and holds Japan-listed large- and mid-cap stocks in proportion to their market capitalization. Under normal market conditions, it invests most of its assets in the index constituents and related depositary receipts.

It suits long-term investors who want low-cost diversification across the Japanese equity market, as well as investors who want to add developed-market exposure to a US-heavy portfolio.

It is a passively managed (index-tracking) ETF run by Franklin Templeton.

The fund holds Japan-listed large- and mid-cap stocks at their index weights, so it follows the overall movement of the Japanese equity market. It makes no stock-picking or market-timing decisions and only reflects periodic index changes, which keeps tracking deviations from manager discretion small and the cost structure simple.

• An expense structure on the low end among single-country ETFs
• Broad diversification across several hundred stocks, which reduces single-company risk
• Direct exposure to yen-denominated assets without currency hedging

Assets under management (AUM) stand at $4.1B, and the total expense ratio is an annual 0.09%.

Even with the same Japan exposure, funds differ in expense ratio and trading liquidity. For long-term holders, the expense ratio matters most, while for frequent traders, the bid-ask spread has a bigger effect on real returns.

The Japanese equity market has been re-rated as corporate governance improvements and expanded shareholder returns continue. However, the direction of the yen and the Bank of Japan's monetary policy cause won- and dollar-converted returns to diverge significantly.

As demand for overseas diversification has grown, there have been repeated periods of steady inflows into single-country Japan ETFs. A stronger preference for low-fee products is also part of the reason money gathers in this category.

Its strengths are a low expense ratio and broad diversification, while its weaknesses are yen volatility and risks unique to Japan, such as policy and sector concentration.

The EWJ ETF and BBJP ETF in the table are larger products that also hold the Japanese equity market. They lead in fund size and trading liquidity, while their expense burden differs by product. If you need currency hedging, the HEWJ ETF is an alternative, and FLKR is the Korean version of the same low-fee series, making it worth comparing on expense ratio and fund size. Beyond the table, you can also consider the yen-hedged DXJ, the large-cap-focused JPXN, and the VEA, which covers all developed markets including Japan.

Here are the points to check before investing in this ETF. Because it concentrates on a single country, Japan, it is best to look first at four things: cost level, currency exposure, distribution method, and sector composition.

The direction of the yen and Bank of Japan policy drive short-term performance. Because this is a single-country product, its diversification benefit does not extend beyond Japan, so it is safer to decide in advance how much of your overall portfolio it will occupy.

It is a solid core vehicle for holding the Japanese equity market at low cost. If liquidity and options trading matter, compare the EWJ ETF or BBJP ETF, and if you want to reduce currency fluctuations, compare the HEWJ ETF before choosing.