Amundi Index MSCI Japan SRI PAB UCITS ETF DR - HEDGED USD (C)

Issuer: Amundi ETF

Asset Class: Equity

TER: 20bps

Trading Currency: USD

Pays Income: False

Listing Date: 22 Sep 2017

Ticker: JPXU

ISIN: LU1646359882

This investment product offers a dual-pronged approach to the Japanese equity market, combining a robust socially responsible investing (SRI) framework with stringent climate-focused objectives. It is designed for investors who want to align their portfolios with both ethical values and the goals of the Paris Agreement. By tracking a Paris-Aligned Benchmark (PAB), the fund invests in Japanese companies that are actively reducing their carbon footprint and contributing to a sustainable, low-carbon future. A crucial feature of this particular share class is its currency hedging, which aims to neutralize the impact of fluctuations between the Japanese Yen and the US Dollar, providing a more direct exposure to the performance of the underlying Japanese equities for dollar-based investors.

The underlying index employs a meticulous, multi-layered selection process. It begins with the broad MSCI Japan universe and applies a series of negative screens to exclude companies involved in controversial sectors such as tobacco, controversial weapons, and fossil fuels. From the remaining pool, it selects companies with the highest Environmental, Social, and Governance (ESG) ratings in their respective sectors. The portfolio is then further refined to meet the PAB criteria, which mandate a significant initial reduction in carbon intensity compared to the parent index and a year-on-year decarbonization trajectory. This ensures the portfolio is consistent with the goal of limiting global warming to 1.5°C above pre-industrial levels.

This fund is an ideal choice for investors seeking a core allocation to Japanese equities through a sustainable and forward-looking lens. It provides access to a portfolio of leading Japanese companies that not only exhibit strong ESG characteristics but are also well-positioned for the global transition to a greener economy. The inclusion of currency hedging makes it particularly attractive for those looking to mitigate foreign exchange risk, thereby isolating investment returns to the performance of the assets themselves. It caters to a growing demand for investment solutions that generate competitive returns while fostering positive environmental and social outcomes.