- First institution in Japan to use FTSE WPU in this way
- FTSE WPU selected to hedge currency exposure for Japanese institutional investor
- Developed and emerging currency risk, inflation risk all hedged
FTSE Group (“FTSE”), the global index provider, today announces that Mitsubishi UFJ Trust and Banking Corporation has commenced provision of a customized solution for institutional investors which hedges foreign currency exposure using the FTSE World Parity Unit (WPU). The application of FTSE WPU, which acts as a stable currency unit providing a means of mitigating currency and inflation risk, is the first of its kind in Japan.
FTSE WPU is a single currency unit constructed from a basket of developed currencies, emerging currencies and storable commodities. Each component within this multi-asset unit is designed to address particular sources of risk: foreign currency risk hedged by diversifying exposure across developed currencies, hedging buying power risk against BRIC currencies, and hedging inflation risk through exposure to commodities. Investors have expressed interest in using FTSE WPU to manage the risk arising from exchange rate fluctuations, and the erosion of purchasing power by inflation.
Yuji Ogino, Director, Japan, FTSE Group said, “FTSE is committed to expanding its range of solutions supporting the needs of sophisticated international investors. We are delighted that Mitsubishi UFJ Trust and Banking Corporation have selected FTSE WPU to provide a unique solution for Japanese investors seeking global investment opportunities.”
Hiroyuki Kurokawa, Senior Manager, Mitsubishi UFJ Trust and Banking Corporation commented, “FTSE WPU does not only mitigate risk of exchange rate fluctuations, it can also act as an inflation hedge maintaining purchasing power in the mid to long term, which is an important issue for investors. We are anxious to convey this solution to our customers.”
FTSE WPU was developed in consultation with Mountain Pacific Group and is managed according to transparent and freely available ground rules.