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.