SSGA launches ETF tracking MSCI Japan index

Dec 2nd, 2015 | By | Category: Equities

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State Street Global Advisors, the asset manager behind the SPDR range of exchange-traded funds, has unveiled a new fund offering large- and mid-cap exposure focused on the Japanese equity market. The SPDR MSCI Japan UCITS ETF is listed on Deutsche Borse (Ticker: ZPDJ) and the London Stock Exchange (Ticker: JPJP), and is available through multiple share classes offering hedged or unhedged exposure relative to the euro or British pound.

SSGA launch ETF tracking MSCI Japanese equities index

The SPDR MSCI Japan ETF has been listed with currency-hedged and unhedged share classes, allowing investors to tailor their level of currency exposure.

The fund tracks the performance of the MSCI Japan Index, a proxy for the large- and mid-cap segment of the Japanese equity maret. The index contains 316 constituents and covers roughly 85% of the free float-adjusted market capitalisation of Japan. As of 1 November 2015, the value of the index has appreciated 9.4% since the start of the year. This is reflective of the effectiveness of the economic and monetary policies enacted under Prime Minister Shinzo Abe’s tenure. The index has exhibited superior performance over the past three years, returning an annual growth rate of 13.5%, compared to the MSCI World Index, which returned 12.2%.

Axel Riedel, head of SPDR ETFs for Germany, commented: “Economically, Japan has had a challenging two decades; however, multiple reforms of fiscal stimulus and accommodative monetary policy have helped it weather the storm with the MSCI Japan up 9.4% year to date in local terms. This fund allows investors to gain exposure to the benefits of this improving market; and as a key market in Asia with significant trading links to China, gaining Japanese exposure can also assist in creating global diversification within a portfolio.”

Through the availability of multiple share classes, investors may tailor their degree of exposure to the Japanese yen. Investors, depending on their outlook for the foreign exchange markets, may opt for full exposure, a full hedge, or a partial hedge by holding a combination of the two share classes.

Deborah Yang, managing director and head of Index, Europe, Middle East and Africa, MSCI, added: “We are delighted that SSGA has selected MSCI indexes for this range of ETFs. Currency-hedged indices are a significant and growing development and are increasingly used by investors who want to manage currency exposure.”

As of 30 November 2015, the fund is tilted towards the consumer discretionary (22.1%), financials (19.3%), industrials (18.8%), information technology (10.5%) and healthcare (7.9%) sectors. Automotive manufacturers play a significant role in the composition of the individual holdings with the three largest securities in the fund being Toyota (5.9%), Mitsubishi (2.8%) and Honda (1.8%). The fund carries a total expense ratio of 0.30%.

The fund is available in: Germany, the United Kingdom, France, Italy, Spain, Luxembourg, Sweden, Finland, Norway, Denmark, Austria and the Netherlands.

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