Amundi broadens Japan equity offering with hedged and unhedged ETFs

Oct 19th, 2015 | By | Category: Equities

Amundi, a leading European provider of exchange-traded funds, is adding to its suite of Japanese equity ETFs with the launch of hedged and unhedged funds tracking the broad TOPIX Index.

Amundi broadens Japan equity offering with hedged and unhedged ETFs

Valérie Baudson, CEO at Amundi ETF, Indexing & Smart Beta.

The asset manager will list two unhedged versions in euro and yen share classes as well as two daily hedged share classes based in US dollars and sterling, thus adding to the already available Amundi ETF Japan Topix UCITS ETF – Daily Hedged EUR (TPXH FP).

The Topix index is a free-float adjusted market capitalisation-weighted index which includes companies listed on the Tokyo Stock Exchange’s First Section; the largest companies listed on the exchange.

According to Amundi, in a market characterised by significant monetary easing – aimed at boosting the local economy – these ETFs will allow investors to access, in a single transaction, a broad exposure to the most liquid Japanese listed stocks with or without currency hedging.

Depending on expectations for the yen versus other major currencies, or desires to remove currency risk from the equation, investors can implement one or a combination of these funds to tailor currency risk, while maintaining consistent Japanese equity exposure.

Valérie Baudson, CEO at Amundi ETF, Indexing & Smart Beta commented: “Our Japanese equity range already manages more than €1.6bn and the launch of new share classes underlines our commitment to offer investors a broad range of solutions to help implement their investment decisions.”

The Amundi currency-hedged funds differ from most currency-hedged ETFs as the hedge is rebalanced daily, as opposed to monthly, according to the fluctuations of the Topix index in yen. This method should provide improved protection over exchange rate fluctuations as the hedge is more closely aligned with day-to-day price changes. Monthly rebalancing, in comparison, can lead to a disconnect between the hedge and price changes in the index over the course of the month. It is important to bear in mind that rebalancing FX positions daily will incur greater operational and transaction costs.

These new share classes broaden the Amundi ETF Japanese equity range which includes, the Amundi ETF MSCI Japan UCITS ETF and the daily-hedged and unhedged Amundi ETF JPX-Nikkei 400 UCITS ETF.

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