BlackRock, Inc. (NYSE: BLK)'s iShares unit, the world's largest issuer of exchange-traded funds, said Thursday it introduced the iShares Currency Hedged JPX-Nikkei 400 ETF (NYSE: HJPX).
The iShares Currency Hedged JPX-Nikkei 400 ETF is the currency hedged answer to the iShares JPX-Nikkei 400 ETF (NYSE: JPXN).
iShares reconfigured an existing ETF into the iShares JPX-Nikkei 400 ETF earlier this year.
Existing ETF Reconfigured: HJPX
“HJPX seeks to track the investment results of the JPX-Nikkei 400 Net Total Return USD Hedged index. The index is a hedged version of JPX-Nikkei 400, a broad-based benchmark composed of large and mid-sized Japanese equities.
“Introduced in January 2014, the index selects companies based on quantitative and qualitative metrics such as return on equity, cumulative operating profit and corporate governance,” according to a statement issued by iShares.
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“HJPX holds its unhedged parent iShares JPX-Nikkei 400 ETF (JPXN) and implements foreign currency forwards, providing investors with Japanese equity exposure while aiming to reduce the impact of movements of the Yen, relative to the U.S. dollar. U.S. investors are exposed to currency risk when investing in international markets and adverse moves in exchange rates can impact performance in U.S. dollar terms,” added iShares.
The JPX-Nikkei 400 Index
In June, Deutsche Asset & Wealth Management introduced the Deutsche X-trackers Japan JPX-Nikkei 400 Equity ETF (NYSE: JPN), the first U.S.-listed ETF to track the JPX-Nikkei 400 Index. The issuer followed that launch with the debut of JPN's currency hedged counterpart, the Deutsche X-trackers Japan JPX-Nikkei 400 Hedged Equity (NYSE: JPNH) in August.
The JPX-Nikkei 400 is a departure from the usual Japanese equity indices in that it is “composed of companies with high appeal for investors, which meet requirements of global investment standards, such as efficient use of capital and investor-focused management perspectives. The new index will promote the appeal of Japanese corporations domestically and abroad, while encouraging continued improvement of corporate value, thereby aiming to revitalize the Japanese stock market,” according to the Japan Exchange Group.
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iShares Single-Country Currency Hedged ETFs
As is the case with other iShares single-country currency hedged ETFs, HJPX is essentially its unhedged equivalent, in this case JPXN, with a currency hedge overlay.
Industrial and financial services stocks each account for more than 19 percent of the new ETF's weight, while consumer discretionary names command 18.8 percent – indicating HJPX is levered to the weak-yen-helping-Japanese-exporters story.
HJPX charges 0.48 percent per year, or $48 per $10,000 invested.
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