Nikko to launch yen-hedged S&P 500 ETF in Japan

Jul 19th, 2018 | By | Category: Equities

Nikko Asset Management is set to list a new ETF on Tokyo Stock Exchange that will provide exposure to the S&P 500 Index while hedging currency exposure between the yen and the US dollar.

Nikko to launch yen-hedged S&P 500 ETF in Japan

The new ETF will hedge currency risk between the yen and the US dollar.

The Listed Index Fund US Equity (S&P 500) Currency Hedge, the first of its kind in Japan, will begin trading on 3 August under the ticker 2521 JP.

Dividends from the fund will be distributed on an annual basis.

The ETF will complement Nikko’s non-hedged S&P 500 offering – the Listed Index Fund US Equity (S&P 500) (1547 JP).

According to Nikko, “The new ETF was developed in response to requests from institutional investors who want exposure to US equities that is not vulnerable to currency fluctuations. The price fluctuations of the new ETF and that of the existing unhedged offering differ greatly. The two funds have a low correlation, which makes the new ETF effective for investors seeking diversification in their investment portfolio.”

Nikko has not announced the fees that will be charged on the new fund although the unhedged version has an expense ratio of 0.16%.

Nikko’s unhedged S&P 500 ETF is one of the firm’s smaller ETFs in terms of assets under management, currently holding approximately ¥5.5 billion ($50m).

Its largest Japan-listed ETF is the ¥3.5 trillion ($31.4bn) Listed Index Fund TOPIX (1308 JP) which provides exposure to the Topix Index – a leading reference for Japanese equities representing over 1,800 companies listed on the Tokyo Stock Exchange.

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