Exploring the ASX ETFs that have captured momentum is a great way to identify opportunities. 

These opportunities stretch across global markets and sectors underrepresented here in Australia. 

ASX ETFs that capture these sectors provide investors with a chance to diversify away from ASX focussed portfolios. 

Here are three funds that have raced ahead of the ASX this year. 

Global X S&P Biotech ETF (ASX: CURE)

This ASX ETF invests in companies that may benefit from further advances in genomic science. This includes companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics, and biotechnology.

The fund provides global exposure to emerging areas within the Health Care sector, at the intersection of science and technology.

Examples of biotechnology companies include those focused on immunotherapy treatments and vaccines to treat human disease. 

As many investors are aware, healthcare and technology are heavily underrepresented on the ASX compared with sectors such as resources and financials. 

This fund could attract investors looking to allocate funding to these sectors that are more prominent in the US. 

The fund has rocketed over the last month, and is subsequently up 25% year to date. 

VanEck Global Clean Energy ETF (ASX: CLNE)

This ASX ETF gives investors a diversified portfolio of 30 of the largest and most liquid companies involved in clean energy production and associated technology and clean energy equipment globally.

It targets businesses related to clean energy production and associated technology and equipment globally, from both developed and emerging markets. 

Relevant business activities include but are not limited to:

• Biofuel & biomass energy production, technology & equipment
• Ethanol & fuel alcohol production
• Fuel cells technology & equipment
• Geothermal energy production
• Hydro electricity production, turbines & other equipment
• Solar energy production, photo voltaic cells & equipment
• Wind energy production, turbines & other equipment. 

Year to date, it has risen an impressive 14%. 

BetaShares Japan ETF – Currency Hedged (ASX: HJPN)

This ASX ETF tracks the performance of an index (before fees and expenses) that provides diversified exposure to the largest globally competitive Japanese companies.

Japan has emerged as one of the most compelling markets for long-term investors after decades of deflation and muted investor interest. 

A combination of structural changes is reshaping the investment landscape, while corporate governance reforms are now gaining momentum. 

These tailwinds have contributed to this ASX ETF rising 18% year to date and 47% in the last 12 months. 

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That does not mean there are no strong returns available. It may simply mean investors need to widen the lens.

For many Australian investors, the first step beyond the ASX is usually the United States. That makes sense. The US remains the world's largest economy and is home to many of the companies most closely linked to artificial intelligence, including Nvidia, Alphabet, and Micron.

The iShares S&P 500 ETF (ASX: IVV) has been one of the simplest ways for ASX investors to get that exposure. The fund seeks to track the performance of the S&P 500 Net Total Return Index in Australian dollars, before fees and expenses.

However, the US is not the only place benefiting from the next wave of global growth.

Closer to our shores, some country-specific ASX ETFs have been racing ahead of both the Australian market and the S&P 500 Index (SP: .INX). Two standout examples are the BetaShares Japan ETF – Currency Hedged (ASX: HJPN) and the iShares MSCI South Korea ETF (ASX: IKO).

The Vanguard Australian Shares Index ETF (ASX: VAS) remains a useful broad exposure to Australian shares. Yet over the past 12 months, HJPN and IKO have shown how powerful it can be to think globally.

Japan is back on the radar

The HJPN ETF has gained more than 53% over the past year.

The fund gives investors exposure to a diversified portfolio of large, globally competitive Japanese companies, while hedging currency exposure back into Australian dollars. BetaShares lists HJPN in the global shares category and notes its Japan focus and currency-hedged structure.

Japan has become one of the more interesting markets in the world for long-term investors.

After decades of deflation and lacklustre investor interest, the country is seeing a mix of catalysts emerge. Inflation has normalised, companies are being pushed to improve corporate governance, and more Japanese businesses are focusing on dividends, buybacks, and stronger capital allocation.

That is not just attracting retail ETF money.

Warren Buffett's Berkshire Hathaway has also increased its exposure to Japanese companies. The appeal appears to be a combination of compelling valuations, strong balance sheets, and more efficient use of capital.

In other words, Japan is not just a short-term trade. It may be a structural reappraisal of an overlooked market.

Korea is riding the AI supply chain

If Japan has been strong, South Korea has been explosive.

The IKO ETF has surged around 200% over the past 12 months, helped by massive gains in Korean semiconductor stocks.

BlackRock says IKO provides exposure to large and mid-sized companies in South Korea and can be used to express a single-country market view.

The key driver has been simple: artificial intelligence needs memory chips.

IKO has heavy exposure to Samsung Electronics and SK Hynix, two global leaders in memory semiconductors. These companies sit deep inside the AI infrastructure buildout, powering data centres, cloud computing, and high-performance computing demand.

This is where the phrase "skate to where the puck is going" matters.

Australian investors can own banks, miners, supermarkets, insurers, and infrastructure companies at home. Many of those businesses are excellent. But the ASX is light on the deepest parts of the AI supply chain.

Korea offers exposure to a very different part of the global economy.

The bigger lesson for ASX investors

The point is not that investors should chase the strongest ETF of the past year.

That can be dangerous. A fund that has surged 50%, 100%, or 200% can easily pull back. Country-specific ETFs can also be more concentrated than broad-market index funds.

However, the bigger lesson is important.

A diversified portfolio does not have to mean owning only the largest companies in Australia. It can mean owning baskets of countries, sectors, and themes that give investors exposure to where global earnings may be heading next.

The ASX remains a sensible starting point. The US remains a powerful global engine.

However, the Japanese and South Korean markets show that the investment world is far bigger than our own backyard — and far broader than the biggest names on Wall Street.

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According to the ETF Market Scoop – October 2025 report, investors poured a record $6 billion into ETFs last month. This surpassed the previous high of $5.8 billion set in July 2025. 

Total inflows are on track to reach $50 billion in 2025. This is significantly above the $31 billion record in 2024. Ultimately, this year is shaping up to be a record-breaking year for ETFs.

Interestingly, the report shed light on increased appetite for Japanese securities. 

Optimism in Japanese stocks

According to Global X, October 2025 saw an impressive surge of Australian ETF inflows into Japanese equities of $167 million.

So why invest in Japanese stocks?

The team at Global X believe the case for investing in Japan is compelling. 

The report from the ETF provider pointed to a few key catalysts. 

It said Japanese inflation is normalising, ending decades of deflation and unlocking pricing power, wage growth, and reinvestment. 

Additionally, sweeping corporate governance reforms driven by the Tokyo Stock Exchange and regulators are prompting companies to repurpose excess cash, increase dividends, and engage in buybacks. 

Blue-chip firms now boast stronger shareholder-friendly practices and meaningful alignment with global megatrends like AI, EVs, and energy transition.

In fact, in 2025, the TOPIX index (major index for the Tokyo Stock Exchange) is outperforming the S&P 500 Index (SP: .INX) and the S&P/ASX 200 Index (ASX: XJO). 

Warren Buffett's Berkshire Hathaway increases its exposure

It's not just ETF investors who are taking notice of the tailwinds for Japanese stocks. 

Global X said that major investors have also started taking note. Warren Buffett's Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) increased its exposure to Japanese companies on the grounds of compelling valuation, strong balance sheets, and efficient capital deployment.

Taken together, these forces mark Japan's equity market not as a relic of past stagnation but as a genuine transformation engine – moderate inflation, governance reform, global industrial leverage and renewed investor interest combine into a favourable backdrop.

How to gain exposure

For Australian investors seeking exposure to Japanese stocks, there are several ASX ETFs to consider. 

Firstly, the iShares MSCI Japan ETF (ASX: IJP). 

The fund is designed to measure the performance of Japanese large & mid-capitalisation companies.

Secondly, investors could consider the BetaShares Japan ETF – Currency Hedged (ASX: HJPN). 

The fund aims to track the performance of an index (before fees and expenses) that provides diversified exposure to the largest globally competitive Japanese companies, hedged into Australian dollars.

Finally, a report from Financial Standard from noted Global X is set to launch its first Japan ETF this month. 

Unlike other ETFs available right now, it will be the first to track the TOPIX – the Japanese equivalent of the ASX 200.

According to the report, it will be listed on the ASX under the ticker code of J100.

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However, it seems that the likes of Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), and Telstra Group Ltd (ASX: TLS) aren't enticing our fundies right now. If a report in the Australian Financial Review (AFR) is to be believed, Australian fund managers are instead looking to the land of the rising sun.

Yep, according to the report, a 'who's who' of many of Australia's top fund managers, including Forager, Optimal Funds Management, Regal Funds, Arnott Capital, and Caledonia, were all present at the Daiwa-Japan Exchange Group conference last week. Representatives from superannuation funds such as AustralianSuper, CBUS, and Rest were also present. As were representatives from our sovereign Future Fund.

This conference is reportedly a major event for those interested in investing in Japan and the Japanese stock market.

It's not surprising to see so much interest in Japan in the current climate. Japanese stocks have been on a tear over the past year or so. The flagship Nikkei 225 Index is up 23.7% over just the past 12 months and up more than 90% since September 2020. Japan is home to some of the world's best-known and most popular brands, including Sony, Toyota, and Nintendo.

Warwick Johnson, of Optimal Funds Management, stated that "I'm bullish, optimistic about the Japanese sharemarket", and noted that his portfolio "was primarily long positions in Japanese companies at the moment".

ETFs: How to invest in Japanese stocks on the ASX

That's all well and good for these professional investors. However, most ordinary ASX investors probably feel like the Japanese markets are out of reach. Although many ASX brokers offer access to US stocks, it is still uncommon to see non-specialist brokers offer access to the Nikkei.

Fortunately, there is an easy way to follow these expert investors and gain access to the best that Japan has to offer right here on the ASX. It's through using exchange-traded funds (ETFs), of course.

There are a few ASX ETFs that give Australian investors easy access to the Japanese markets.

Two of those are the BetaShares Japan Currency Hedged ETF (ASX: HJPN) and the iShares MSCI Japan ETF (ASX: IJP).

Both of these funds offer broad access to the Japanese market. And both offer significant exposure to Sony, Toyota, and Nintendo, as well as other Japanese stocks like Mitsubishi UFJ, Hitachi, and Mitsubishi Heavy Industries.

The most significant difference between these two funds is the use of currency hedging. Whenever an investor buys an international stock, fluctuations between the currency that the stock is denominated in and our own Australian dollar can change its value. The Betashares Japan Currency Hedged ETF takes away this variable by using complex financial engineering. This can help ASX investors if the value of the yen rises against the Australian dollar, but it can also be equally detrimental if the opposite occurs.

The iShares Japan ETF doesn't use hedging, so investors just have to take the good and the bad of currency fluctuations.

If you do decide to opt for the ETF with currency hedging, it will cost you slightly more, though. The BetaShares Japan Currency Hedged ETF charges a management fee of 0.56% per annum, while the iShares Japan ETF charges you 0.5% per annum.

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This week, it was revealed that Warren Buffett's Berkshire Hathaway (NYSE: BRK.B) is planning to issue new yen-denominated bonds.

While that may sound like business as usual for the finance giant, it's what comes next that really matters: the funds could be used to increase Berkshire's investments in Japan's five major trading houses.

Buffett has already made no secret of his admiration for Japan's corporate discipline, shareholder-friendly reforms, and capital efficiency. Now, he looks set to take things a step further — and ASX investors don't have to miss out.

Here's how you can tap into Japan's investment revival with a couple of easy-to-access ASX ETFs. They are as follows:

Betashares Japan ETF Currency Hedged (ASX: HJPN)

If you're looking to follow Warren Buffett's footsteps with a cleaner currency exposure, the Betashares Japan ETF Currency Hedged is a great place to start. This ASX ETF provides investors with exposure to a diversified portfolio of leading Japanese companies, while hedging out the effects of currency fluctuations between the yen and the Australian dollar.

The fund tracks the S&P Japan Exporters Hedged AUD Index, which includes household names like Toyota, Sony, and Hitachi. These are companies that stand to benefit from global demand and a weaker yen.

Given Buffett's interest in Japan's global trading giants, the Betashares Japan ETF Currency Hedged offers a good way to gain broad exposure to some of the country's best-known international players.

iShares MSCI Japan ETF (ASX: IJP)

If you'd prefer to ride the yen, rather than hedge it, the iShares MSCI Japan ETF is another option worth considering this month. This ASX ETF tracks the MSCI Japan Index, offering investors access to over 200 of Japan's largest publicly listed companies. This includes financials, industrials, and consumer goods.

While unhedged ASX ETFs do come with added currency risk, they also offer the potential for upside if the Japanese yen strengthens over time. With ongoing structural reforms in Japan, rising interest from foreign investors, and a renewed focus on corporate governance, many believe the Japanese market (and the Japanese yen) still has room to run.

And if Warren Buffett's buying, that could certainly just tip the scales for some.

Overall, both ASX ETFs could be good options if you are a fan of Buffett's investment style and require some international exposure for your portfolio.

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According to the Financial Times, Berkshire Hathaway (NYSE: BRK.B) has increased its stakes in Japan's five biggest trading houses—Mitsubishi Corporation, Mitsui, Itochu, Marubeni, and Sumitomo Corporation—after negotiating to remove a 10% ownership cap.

Berkshire's holdings in these companies have now edged closer to 10%, with Buffett praising them for their resemblance to his own investment conglomerate.

These trading giants are critical to Japan's economy, handling imports of key raw materials such as oil, gas, iron ore, and copper while supporting Japan's powerhouse industries in automobiles, electronics, and machinery.

Warren Buffett first revealed his investment in Japan's trading houses in 2020, and in his latest shareholder letter, he reiterated his belief in their long-term potential. The Oracle of Omaha has signalled that Berkshire intends to hold these stakes "for many decades," seeing strong value in their business models.

For Australian investors, Buffett's bullish view on Japan presents an interesting opportunity. The good news? You don't need to pick individual Japanese stocks to follow his lead.

Instead, two ASX-listed exchange-traded funds (ETFs) provide easy and diversified access to Japan's thriving stock market. Here's what you need to know about them:

iShares MSCI Japan ETF (ASX: IJP)

For those wanting broad exposure to Japan's stock market, the iShares MSCI Japan ETF could be a solid choice. This ASX ETF tracks the MSCI Japan Index, which covers approximately 85% of the Japanese stock market and provides access to large and mid-cap Japanese companies.

Why consider iShares MSCI Japan ETF?

• It offers diversified exposure to Japan's biggest and most successful businesses.
• It covers sectors like technology, consumer goods, and industrials—many of which are under-represented on the ASX.
• It allows investors to gain exposure to Japan's long-term economic growth without picking individual stocks.

Betashares Japan Currency Hedged ETF (ASX: HJPN)

Another option for Aussie investors is the Betashares Japan Currency Hedged ETF. This ASX ETF is designed to give exposure to Japan's biggest global companies while reducing the impact of currency fluctuations between the Japanese yen and the Australian dollar.

Key benefits of the Betashares Japan Currency Hedged ETF are as follows:

• It focuses on Japan's largest companies that generate significant revenue outside of Japan, making it a great way to invest in globally competitive businesses.
• It is currency-hedged, meaning that movements in the yen/AUD exchange rate won't affect returns as much.
• It provides diversification into sectors not well-represented in the Australian market.

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The VTS ETF listed on the ASX in May 2009, and between then and February 2025, it returned an average of 16% per year, which is great. However, it's also worth noting that the ETF unit price has dropped close to 10% since 31 January 2025.

The fund's pure exposure to the US share market has been very beneficial over the long term, but the worries about tariffs and the US economy are painful in the short term.

For investors who don't want their portfolio as exposed to the US share market, it could be a good idea to look at ETFs that give different geographic exposure.  

Betashares FTSE 100 ETF (ASX: F100)

This fund gives investors exposure to the UK share market. Many of these businesses just happen to be listed in London, but they can earn profit from across the world.

Some of the biggest companies in this portfolio include AstraZeneca, Shell, HSBC, Unilever, BP, Rolls Royce, GSK, London Stock Exchange, BAE Systems, Diageo, and Barclays.

Impressively, the fund's unit price has risen since the end of January 2025, despite the volatility of the global share market, as the chart shows.

In the three years to February 2025, the F100 ETF has delivered a net return of 12.6%. That's stronger than the S&P/ASX 300 Index (ASX: XKO) return of an average of 8.9% per year over the same time period. Of course, past outperformance is not a guarantee of future outperformance.

I also like that this fund has a double-digit weighting to five sectors, which is good diversification in my eyes. Those five industries are: financials (23.6%), consumer staples (17%), industrials (15.2%), healthcare (12.1%), and energy (11%).

Betashares Japan Currency Hedged ETF (ASX: HJPN)

The Japan share market has livened up in recent times after changes were made to encourage Japanese businesses to invest and grow.

This fund owns approximately 140 businesses, and its Yen exposure is currency hedged, which aims to reduce the effect of currency fluctuations on portfolio performance.

Some of the biggest positions in this portfolio include Toyota Motor, Mitsubishi UFJ Financial, Sony, Hitachi, Keyence, Nintendo, and Canon.

In the three years to February 2025, this ASX ETF has delivered an average annual return of 16.5%. Again, past performance is not a reliable indicator of future returns, but it shows that Japanese stocks can deliver good returns.

I think this could also be a solid option for diversification to add to US and Australian exposure. There are four sectors that have a double-digit weighting in the HJPN ETF: consumer discretionary (23.8%), industrials (23%), IT (15.8%), and financials (14%).

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On the Tokyo Stock Exchange, we can find some of the leading Asian companies, including Toyota, Sony, Mitsubishi, Hitachi, Nintendo, Honda, Daikin Industries, Canon and Bridgestone.

I think there are a few good reasons to consider the HJPN ETF beyond just its past performance.

Diversification

The Japanese share market can provide exposure to under-represented sectors in the ASX share market.

Looking at the sector allocation, five industries have a weighting of more than 10% in the HJPN ETF: consumer discretionary (24.3%), industrials (23.4%), IT (17.9%), financials (10.4%), and healthcare (10.1%). Meanwhile, around half of the S&P/ASX 200 Index (ASX: XJO) is weighted to just two sectors, ASX bank shares and ASX mining shares.

Plenty of the leading Japanese businesses generate a "substantial portion" of their revenue outside of Japan, according to BetaShares, which is good underlying diversification of their earnings. A lot of the profit generated by large ASX blue-chip shares is generated within Australia (and New Zealand).

It's currently invested in around 150 businesses, which is ample diversification in terms of holdings, in my opinion.

Improving situation for Japanese stocks

In the 12 months to 31 May 2024, the HJPN ETF delivered a net return of 37.47% and I think it could keep performing solidly. Remember, past performance is not a reliable indicator of future performance with this ASX ETF.

New rules and disclosures by the Tokyo Stock Exchange are targeting companies with "poor capital efficiency, asking them to disclose plans for how they will realise corporate value for shareholders", according to investment outfit Alliance Trust.

Japan may be breaking from the shackles of its deflationary situation, which has affected its economy for decades. 'Real' wage growth – where wages rise faster than inflation – could keep deflation at bay.

Japan's biggest union recently agreed to its first "significant" pay rise for its workers in 33 years.

Alliance noted that WTW economists believe wage growth and easing inflation could increase domestic consumption, benefiting Japanese shares, particularly domestic-focused Japanese stocks.

Reasonable fee

It's not the cheapest ASX ETF, with an annual management fee of 0.56%. There are plenty of cheaper ASX ETFs out there, but I think it's a fair cost for the specific Japanese allocation it can give to an Aussie's portfolio. Active managers would typically charge at least 1% to invest in Japanese shares.

This fund also has currency hedging for the Japanese yen exposure, reducing the effect of currency fluctuations on portfolio performance.

Foolish takeaway

I think it's a compelling ASX ETF to consider with actions that are supporting the Japanese economy and stock market. I don't know what the short-term returns will be, but I'm optimistic about the longer term as companies better utilise their capital for growth and/or improve shareholder returns.

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