iShares, a family of exchange-traded funds (ETFs) managed by BlackRock, has launched the iShares MSCI Japan USD Hedged UCITF ETF.
The new ETF invests in physical index securities and builds in currency hedging with the aim of reducing the impact of exchange rate fluctuations between the base currency of the Fund and the currency of the constituent securities in the Index.
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Listed on the London Stock Exchange, the new ETF has a total expense ratio of 0.64% and will invest in Japanese equities that cover the sterling, the euro and the Swiss franc.
The index also incorporates a monthly hedge, using a one month forward foreign-exchange contract, to reduce exposure to the impact of currency fluctuations between US dollars and Japanese Yen.
iShares EMEA product head Tom Fekete was quoted by fundweb.co.uk as saying, "Currency hedged ETFs offer efficient and cost-effective exposures to a market in a single transaction, and mean investors do not need to establish and manage currency hedging and overlay processes in-house."
"This new ETF brings our suite of equity and fixed income currency-hedged ETFs to 13 and we believe it will prove popular with investors as uncertain market conditions persist," Fekete added.
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