Ossiam launches smart beta currency-hedged Japan Minimum Variance ETF

Mar 10th, 2016 | By | Category: Equities

Paris-based smart beta exchange traded provider Ossiam has unveiled a new ETF giving investors access to the performance of the most liquid Japanese stocks, while protecting them from currency fluctuations.

The Ossiam Japan Minimum Variance UCITS ETF Hedged Index 1C (EUR) (Xetra: OSXJ) launches on Xetra today tracking the S&P/TOPIX 150 Index, granting investors access to the largest blue-chip companies listed on the Tokyo Stock Exchange. 

Ossiam expands smart beta line-up with currency-hedged Japan Minimum Variance ETF

The Ossiam Japan Minimum Variance ETF provides exposure to the most liquid stocks in the S&P/TOPIX 150 Index while lowering the portfolio’s volatility through an optimisation process.

Access to the index allows investors to gain a broad market exposure to Japanese stocks across all sectors, while the use of the currency-hedge overlay mitigates the risk of adverse movements of the yen against the euro.

Companies from the reference index are initially screened to filter out any stocks with abnormal price irregularities. The remaining stocks are weighted with the aim of minimising the expected volatility of the final portfolio. This is achieved through an optimisation process that considers the historical volatilities of, as well as the correlations between, the constituents. To prevent over-concentration, no single stock may exceed a 4.5% weighting while individual sectors are not allowed to exceed 20%.

As of 9 March 2016, the fund has significant exposure to the information technology (20.6%), industrials (20.0%), consumer staples (18.3%) and consumer discretionary (12.8%) sectors.

The total expense ratio of the fund is 0.65%.

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