Source has launched USD- and EUR-hedged share classes of the Source JPX-Nikkei 400 UCITS ETF, and reduced the annual management fee on the unhedged ETF to 0.20% from 0.29%.
The hedged share classes will also be available at the same 0.20% management fee.
The JPX-Nikkei 400 Index provides broad exposure across the large-cap, small-cap, growth and innovation segments of the Tokyo Stock Exchange, but unlike other benchmarks, focuses on companies with the potential to generate shareholder value. It was developed by Nikkei and the Japan Exchange Group, and selects stocks on the basis not only of size, but also return on equity, operating profit, transparency andcorporate governance. The index is rapidly becoming many institutional investors’ preferred benchmark for Japanese equity exposure.
“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,” says Michael John Lytle, Chief Development Officer at Source. “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, a frequency that provides an efficient level of hedging without incurring excessive costs. The EUR-hedged version will trade on Xetra and the USD-hedged version on the London Stock Exchange(LSE). The unhedged version is denominated in JPY and trades on Xetra in EUR and on the LSE in both USD and GBP.
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.