The Japan Exchange Group, Inc. and JPX Market Innovation & Research, Inc., collectively known as the JPX Group, along with Nikkei Inc., serve as the index providers for the JPX-Nikkei Index 400 Net Total Return Index, which is the underlying index for the JPXN ETF. The ETF aims to track the investment results of this index, composed of common stocks primarily listed on the Tokyo Stock Exchange Prime Market, Standard Market, or Growth Market, as well as securities listed on these markets that are considered equivalent to common stocks by the Index Provider. These securities are selected based on various criteria, including trading value, market value, and qualitative factors related to corporate governance and disclosure.
While the primary focus of the iShares JPX-Nikkei 400 ETF (JPXN) may be tracking the JPX-Nikkei Index 400 Net Total Return Index, dividend distribution remains an essential aspect for income-seeking investors. Dividend distributions from this ETF typically occur on a periodic basis, reflecting the performance and dividend policies of the constituent companies within the index. The selection criteria for the index constituents include factors such as trading value, market value, and qualitative assessments, ensuring that companies with investor appeal and global investment standards are included. JPXN provides a diversified exposure to Japanese stocks and can offer potential dividend income to investors along with capital appreciation.
Tracking the JPX-Nikkei Index 400 Net Total Return Index is the primary objective of the JPXN ETF. This ETF is designed to mirror the performance of companies listed on the Tokyo Stock Exchange Prime Market, Standard Market, or Growth Market. The index selection process is meticulous, focusing on factors such as trading value, market capitalization, and three-year average returns on equity. Additionally, qualitative criteria related to corporate governance and disclosure are taken into account. The ETF aims to capture the essence of the Japanese equity market and provide investors with an efficient means of gaining exposure to companies deemed essential by the Index Provider. With a focus on representing the Japanese yen currency and a commitment to low portfolio turnover, JPXN offers a cost-effective and risk-controlled approach to investing in Japanese equities.
The correlation aspect of the iShares JPX-Nikkei 400 ETF (JPXN) is a key factor in understanding its behavior in relation to the Japanese equity market. JPXN seeks to track the JPX-Nikkei 400 Net Total Return Index, which comprises companies primarily listed on the Tokyo Stock Exchange. Given its focus on Japanese stocks, JPXN typically exhibits a strong positive correlation with the overall performance of the Japanese equity market. This makes JPXN a valuable tool for investors looking to gain exposure to Japan's stock market and assess its performance in relation to the benchmark index.
The iShares JPX-Nikkei 400 ETF (JPXN) focuses on tracking the JPX-Nikkei Index 400 Net Total Return Index, which includes common stocks primarily listed on the Tokyo Stock Exchange. The Index Provider selects these stocks based on various criteria, including trading value, market value, three-year average returns on equity, and corporate governance factors. As of March 31, 2023, the ETF's holdings are heavily concentrated in the industrials sector. This sector focus aims to align with the Index Provider's vision of high-appeal companies that adhere to global investment standards, potentially offering investors exposure to Japan's industrial growth.
The exposure characteristic of the iShares JPX-Nikkei 400 ETF (JPXN) is centered on tracking the JPX-Nikkei Index 400 Net Total Return Index. This index is composed of common stocks primarily traded on the Tokyo Stock Exchange Prime Market, Standard Market, or Growth Market. Additionally, it includes securities listed on these markets, which are deemed by the index provider to be equivalent to common stocks and have high appeal for investors while meeting global investment standards. The Underlying Index selects its 400 constituents based on factors such as trading value over the past three years, market value, three-year average returns on equity, cumulative operating profit, and market value on the selection base date, with specified weightings. It also takes qualitative factors related to corporate governance and disclosure into account. As of March 31, 2023, a significant portion of the Underlying Index comprises securities from the industrials sector, although the composition may evolve over time. Investors seeking exposure to Japanese equities through JPXN can benefit from a diversified representation of large, mid, and small-capitalization companies. While JPXN does not actively aim to outperform the Underlying Index, its indexing approach offers potential advantages, such as lower costs and better after-tax performance. The fund primarily invests in component securities of its Underlying Index and may use representative sampling to achieve an investment profile similar to that of the index. It may also employ certain derivatives, options, and cash equivalents to manage its portfolio effectively.
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