Lyxor has rolled out a euro-hedged share class for its Lyxor JPX-Nikkei 400 (DR) UCITS ETF on Xetra.

The fund uses a screening process to provide exposure to quality, well-governed Japanese companies.

The share class (JPNE GY) hedges currency risk between the Japanese yen and the euro on a daily basis. Income is distributed.

Investors can already access a euro-hedged share class for the ETF on Euronext Paris (JPXH FP).

The fund’s underlying index is the popular JPX-Nikkei 400 Index, developed by Nikkei and the Japan Exchange Group.

The index, which has become institutional investors’ de facto preferred benchmark for Japanese equity exposure, tracks quality, well-governed Japanese companies by employing a screening process based on efficient use of capital and investor-focused management principles.

This screening process scores eligible firms listed on the Tokyo Stock Exchange or JASDAQ market on quantitative measures of profitability and market capitalization and qualitative measures of corporate governance.

To assess corporate governance, the index methodology evaluates the quality of disclosed earnings information and establishes whether the firm has appointed independent outside directors and adopted IFRS accounting standards.

The top 400 companies ranked by this process are selected and weighted by free-float market capitalization subject to a cap of 1.5%.

The fund comes with an expense ratio of 0.25% across all share classes, hedged or unhedged, and currently has around €470 million in assets under management.

It is also available in US dollar-hedged and pound sterling-hedged share classes on London Stock Exchange. Non-hedged share classes are available on LSE, Euronext Paris, and Euronext Amsterdam.

At 0.25% the fund is reasonably priced. For cost-conscious investors, however, the cheapest ETF in Europe to track the JPX-Nikkei 400 is the Amundi JPX-Nikkei 400 UCITS ETF which comes with an expense ratio of 0.18%.

This fund is also offered in several currency-hedged share classes and similarly houses approximately €470m AUM. The EUR-hedged share class on Xetra trades under the ticker JP4H GY.