Important Information
Investors should not base investment decisions on this website alone. Please refer to the Prospectus for details including product features and the risk factors. Investment involves risks. Past performance is not indicative of future performance. There is no guarantee of the repayment of the principal. Investors should note:
- Global X Japan Global Leaders ETF (the “Fund”) seeks to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the FactSet Japan Global Leaders Index (the “Index”).
- The Index is a new index. The Index has minimal operating history by which investors can evaluate its previous performance. There can be no assurance as to the performance of the Index. The Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
- The Index is reconstituted annually. Eligible securities are added into the Index as constituents during the next scheduled annual reconstitution. Similarly, securities that no longer meet the eligibility criteria of the Index may continue to remain in the Index until the next scheduled annual reconstitution, at which point they may be removed. There is no guarantee that the representativeness of the Index is optimised from time to time.
- The Fund’s investments are concentrated in securities in Japan. The Fund’s value may be more volatile than that of a fund with a more diverse portfolio. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the Japanese market.
- The Japanese economy is heavily dependent on international trade and may be adversely affected by protectionist measures, competition from emerging economies, political tensions with its trading partners and their economic conditions, natural disasters and commodity prices. Further, the TSE or JASDAQ has the right to suspend trading in any security traded thereon. The Japanese government or the regulators in Japan may also implement policies that may affect the Japanese financial markets.
- The base currency of the Fund is JPY but the trading currency of the Fund is in HKD. The Net Asset Value of the Fund and its performance may be affected unfavourably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls.
- The Index Calculation Agent calculates and maintains the Index. If the Index Calculation Agent ceases to act as index calculation agent in respect of the Index, the Index Provider may not be able to immediately find a successor index calculation agent with the requisite expertise or resources and any new appointment may not be on equivalent terms or of similar quality. There is a risk that the operations of the Index may be disrupted which may adversely affect the operations and performance of the Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from redemption requests.
- The trading price of the Units on the Stock Exchange of Hong Kong is driven by market factors such as the demand and supply of the Units. Therefore, the Units may trade at a substantial premium or discount to the Fund’s Net Asset Value.
- Payments of distributions out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Unit of the Fund and will reduce the capital available for future investment.
Unhedged ETFs Set to Outperform Amid Yen Appreciation
Japan experienced another round of stock market turmoil in early September, driven by concerns over the performance of US tech stocks, economic recessions, and the ongoing appreciation of JPY. While Yen appreciation seems inevitable due to the narrowing policy rate gap as the Fed enters a rate-cutting cycle, we argue that it may not necessarily be a negative factor for global investors, as the impact on corporate earnings is manageable and the currency apprciation can be positive for dollar-denominated returns for unhedged products.
3150 HK Outperforms Peers Amid Yen Appreciation
In a Yen appreciation environment, unhedged ETF (in terms of currency) appears to be a better investment tool for Hong Kong investors to tap into Japan market. Yen appreciated by 10% in the past 3 months, leading to the excess return of Global X Japan Global Leaders ETF (3150 HK, in HKD) compared to its underlying index (Fig 2). For global investors, benefits from Yen appreciation should outweigh the negative impacts on corporate earnings, and the consensus outlook is for Japanese companies to maintain profit growth in coming years despite a stronger Yen (Fig 3). Compared to hedged products, 3150 HK demonstrated better resilience amid market turbulence thanks to the additional cushion from currency appreciation (Fig 4).
Remain Positive on Japan Equity Market
Despite short term volatility caused by global macro uncertainty and Yen appreciation, we remain positive on Japan equity market as supported by a reviving domestic economy, solid export, and ongoing capital market reforms. August economic data demonstrated an ongoing recovery in domestic consumption, solid increase in corporate investments, and YoY real wage growth for the second consecutive months, providing sound support for corporate earnings growth and investor sentiments.
Global X Japan Global Leaders ETF (3150 HK) invests in 20 leading Japanese companies with established global presence and customer bases, allowing investors to capture investment opportunities arising from the sound product competitiveness of leading Japan companies and the structural changes in Japan economy and capital market.
Related Global X ETFs’ Product1
Global X Japan Global Leaders ETF (3150 HK) |
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Inception Date | 24 Nov 2023 | ||
Reference Index | FactSet Japan Global Leaders Index2 | ||
Primary Exchange | Hong Kong Stock Exchange | ||
Ongoing Charges Over A Year | 0.68% p.a. | ||
Product Page | Link |
The Fund adopts a single management fee structure, whereby a single flat fee will be paid out of the assets of the Fund to cover all of the costs, fees and expenses of the Fund. As the Fund is newly set up, this figure is an estimate only and represents the sum of the estimated ongoing charges over a 12-month period, expressed as a percentage of the estimated average Net Asset Value of the Listed Class of Units of the Fund over the same period. It may be different upon actual operation of the Fund and may vary from year to year. As the Fund adopts a single management fee structure, the estimated ongoing charges of the Fund will be equal to the amount of the single management fee, which is capped at 0.68% of the average Net Asset Value of the Listed Class of Units of the Fund. Any ongoing expenses exceeding 0.68% of the average Net Asset Value of the Listed Class of Units of the Fund will be borne by the Manager and will not be charged to the Fund. Please refer to the Key Facts Statement and the Prospectus for further details.