Source launches currency hedged JPX-Nikkei 400 shares

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ETF provider Source has launched dollar and euro hedged share classes for the Source JPX-Nikkei 400 Ucits ETF, while bringing its annual management fee on both hedged and unhedged share classes to 0.2%.

The JPX-Nikkei 400 index was created by Nikkei and the Japan Exchange Group in response to policy moves to encourage Japanese companies to focus on generating shareholder value. The constituents are chosen not only on the basis of size, as per historical capitalisation weighted indices, but also on the basis of return on equitiy, operating profit, transparency, and corporate governance.

Michael John Lytle, chief development officer at Source, said: “Japan has been one of the best performing equity markets over the past year, and the JPX-Nikkei 400 has outperformed better-known benchmarks such as the Nikkei 225 and TOPIX during this period. However, the stimulus measures that are helping to revive the country’s economic growth prospects are at the same time weakening the yen, which has diminished the overall returns for non-yen investors. The new hedged share classes offer protection from further devaluation – versus either the US dollar or the euro.”

The hedged versions will use one-month-rolling forward FX contracts. The euro hedged version will trade on Xetra and the dollar hedged version on the London Stock Exchange. The unhedged version is denominated in yen and trades on Xetra in euro and on the LSE in both dollar and sterling.

The ETF is registered for sale in Austria, Finland, France, Germany, Ireland, Italy (for institutional investors only), Luxembourg, the Netherlands, Norway (for institutional investors only), Spain, Switzerland (for institutional investors only), Sweden and the UK.

Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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