DXJ vs EWJ: Which ETF Is Better in 2026?
A metric-by-metric comparison of WisdomTree Japan Hedged Equity Fund (DXJ) and iShares MSCI Japan ETF (EWJ) — both Single Country - Developed funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
DXJ and EWJ compete directly — both are Single Country - Developed funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — DXJ scores higher: 76.4 (Grade B+) versus 69.2 for EWJ. That doesn't make EWJ a bad fund; it means DXJ currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| DXJ | EWJ | |
|---|---|---|
| Category | Single Country - Developed | Single Country - Developed |
| Expense ratio | 0.48% | 0.49% |
| Fund size (AUM) | $7.1B | $22.3B |
| Dividend yield | 0.97% | 0.77% |
| 1-year return | +48.57% | +24.38% |
| 3-year return | +123.63% | +56.89% |
| Volatility | 18.01% | 20.52% |
| Max drawdown | -22.19% | -14.68% |
| Sharpe ratio | 2.42 | 0.94 |
| ETFValuer score | 76.4 | 69.2 |
| Grade | B+ | B |
| Overall rank | #33 | #120 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — DXJ charges 0.48% a year versus EWJ's 0.49%. A difference this small (about $1.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What EWJ's Fees Cost You
EWJ charges an expense ratio of 0.49% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, DXJ returned +123.63% versus +56.89% for EWJ — a gap of about 66.7 percentage points. On risk, EWJ has held up better historically, with a shallower max drawdown (-14.68% vs. -22.19%). DXJ currently has the better risk-adjusted return (Sharpe ratio of 2.42 vs. 0.94), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), DXJ and EWJ show a strong correlation of 0.850 — clearly related, with room to diverge. There is some genuine differentiation here, but not enough to call these complementary holdings. Pairing them mostly concentrates risk rather than spreading it.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.850 | Strong — clearly related, with room to diverge |
| R-squared | 72.2% | 72.2% of DXJ's daily moves are explained by EWJ's |
| Tracking error (annualised) | 10.94% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | DXJ +32.20% · EWJ +16.79% | DXJ ahead by 15.40 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, DXJ finished as much as +27.3 points ahead of EWJ at the best extreme and -7.2 points at the worst — a 34.5-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
DXJ and EWJ hold 5 of the same companies among their top 10 positions. Those shared names make up 17.7% of DXJ and 15.4% of EWJ. That's meaningful duplication. The funds aren't interchangeable, but a good share of your money would be riding on the same companies twice.
| Shared Holding | DXJ Weight | EWJ Weight |
|---|---|---|
| Toyota Motor Corp. | 4.56% | 4.41% |
| Mitsubishi UFJ Financial Group Inc. | 4.71% | 4.09% |
| Sumitomo Mitsui Financial Group Inc. | 3.06% | 2.66% |
| Mitsubishi Corp. | 3.06% | 2.09% |
| Mizuho Financial Group Inc. | 2.31% | 2.13% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean DXJ if…
- You want the lower running cost — 0.48% vs 0.49%, about $1 a year less on a $10,000 position
- Current income matters to you — it yields 0.97% against 0.77%
- It has been the calmer ride (18.0% volatility vs 20.5%)
- You care about return per unit of risk — its Sharpe ratio of 2.42 beats 0.94
Lean EWJ if…
- You want the deeper, more liquid market ($22B in assets vs $7B)
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is DXJ or EWJ better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — DXJ scores higher: 76.4 (Grade B+) versus 69.2 for EWJ. That doesn't make EWJ a bad fund; it means DXJ currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, DXJ or EWJ?
DXJ currently has the lower expense ratio (0.48% vs. 0.49%).
Can I hold both DXJ and EWJ?
Yes, and it may be worth doing. DXJ and EWJ correlate at only 0.85 over the past 3.0 years, so they behave differently enough that holding both is a genuine diversification decision rather than a redundant one. Size each to the role you want it to play.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.