Deutsche Asset & Wealth Management, the provider of db X-trackers exchange-traded funds (ETFs), has launched a physically-backed direct replication ETF on Japan’s best-known stock index.
Listed on the London Stock Exchange, Deutsche Börse (Xetra) and Borsa Italiana, the db X-trackers Nikkei 225 UCITS ETF (DR) (XDJP) provides physical exposure to the Nikkei 225 Index, an index reflecting the performance of 225 liquid stocks representative of the First Section of the Tokyo Stock Exchange.
Major holdings include Fast Retailing, the owner of Uniqlo, robotics manufacturer Fanuc, telecomms and internet giant SoftBank, multinational electronics and ceramics manufacturer Kyocera and motorcycle and car producer Honda. Industrial, consumer goods and consumer services companies comprise approximately 63% of the index.
The index has risen 24.5% over the past three months following the announcement of new elections in the country and the eventual accession of Shinzo Abe to the office of prime minister. Mr Abe has vowed to aggressively loosen monetary policy in a bid to stimulate economic growth.
The launch is the latest in Deutsche Asset & Wealth Management’s roll-out of a new range of direct replication ETF (also referred to as physical or physically backed ETFs). In December, the Frankfurt-headquartered asset manager, which is part of Deutsche Bank, launched direct replication ETFs on the FTSE 100, the Euro STOXX 50 and Euro STOXX 50 Ex Financials indices.
Manooj Mistry, Head of Exchange-Traded Products, EMEA, at Deutsche Asset & Wealth Management, said: “We’ve noted a pick-up in interest this year from investors looking to take Japanese equity market exposure, so the launch of this new ETF is perfectly timed.”
Deutsche Asset & Wealth Management now offers both direct and indirect replication db X-trackers ETFs on Japanese equity underlyings. It also offers GBP-hedged exposure to Japanese equities via the db X-trackers MSCI Japan Index UCITS ETF (XMJG) and EUR-hedged exposure via the db X-trackers MSCI Japan Index UCITS ETF (XMK9).
The fund has total expense ratio of 0.50% per annum.