BlackRock (NYSE: BLK) added on to its line of iShares currency hedged exchange traded funds for those looking for exposure to Japan through a relatively new, multi-factor index, the JPX-Nikkei 400.
According to a recent press release, BlackRock introduced the iShares Currency Hedged JPX-Nikkei 400 ETF (NYSEArca: HJPX) on Thursday. The new ETF has a 0.48% expense ratio
HJPX will try to reflect the performance of the JPX-Nikkei 400 Net Total Return USD Hedged Index, which acts as a hedged version of the JPX-Nikkei 400, a relatively new benchmark of 400 Japanese equities targeted for their return on equity, cumulative operating profit, quality and capital efficiency.
The JPX-Nikkei 400 may be seen as an alternative index that uses a multi-factor approach, as opposed to a traditional market capitalization methodology. Specifically, 1,000 stocks are selected based on trading value in the past three years and market value on the selection base date at the end of June. Each stock is scored by a 3-year average return-on-equity, 3-year cumulative operating profit and market value on the selection date, with weights of 40%, 40% and 20%, respectively. 400 stocks are then selected by the final ranking, according to Nikkei Indexes.
“iShares Currency Hedged JPX-Nikkei 400 ETF allows investors to gain broad exposure to Japanese companies tha have been selected based on perceived shareholder-friendly activities, while mitigating for currency movements,” Jane Leung, Managing Director at BlacRock iShares, said in the press release. “Investors can easily combine HJPX with its unhedged version, JPXN, to tailor currency risk while maintaining consistent Japanese equity exposure.”
HJPX is seen as a currency-hedged version of the iShares JPX-Nikkei 400 ETF (NYSEArca: JPXN), which also has a 0.48% expense and $131.5 million in assets under management. HJPX holds JPXN and applies foreign currency forward swaps to hedge against a depreciating Japanese yen.