iShares MSCI Japan EUR Hedged UCITS ETF (Acc)

Issuer: iShares

Asset Class: Equity

TER: 64bps

Trading Currency: EUR

Pays Income: False

Listing Date: 01 Oct 2010

Ticker: IJPE

ISIN: IE00B42Z5J44

This investment vehicle offers targeted exposure to the Japanese stock market, comprising a wide range of large and mid-capitalisation companies. It is specifically designed for investors who wish to participate in the performance of Japanese equities while mitigating the risk associated with currency fluctuations between the Japanese Yen and the Euro. The fund achieves this by tracking a currency-hedged index, which employs monthly forward currency contracts to neutralise the impact of exchange rate movements on investment returns. This strategy aims to deliver a return that closely mirrors the local performance of the Japanese market.

Investing in Japan provides access to a highly developed and innovative economy, home to world-leading corporations in sectors such as automotive, electronics, and robotics. However, for a euro-based investor, the returns from Japanese assets can be significantly affected by the JPY/EUR exchange rate. This fund serves as a strategic tool to isolate the equity performance from currency volatility. It is particularly suitable for investors who have a specific view on the Japanese stock market but are uncertain about, or wish to avoid, the direction of the yen. It can act as a core satellite holding for geographic diversification within a broader portfolio.

The product provides a cost-effective and convenient way to gain a diversified holding in Japanese companies through a single trade. The accumulating share class structure means that any dividends paid by the underlying companies are automatically reinvested back into the fund, fostering potential for long-term capital growth through the power of compounding. By removing the currency variable, investors can make a more direct bet on the fundamental strength and growth prospects of corporate Japan.