Daiwa launches core Japan REIT ETF

Feb 13th, 2019 | By | Category: Alternatives / Multi-Asset

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Daiwa Asset Management has launched the Daiwa Tokyo Stock Exchange REIT Core Index ETF (2528 JP) on Tokyo Stock Exchange (TSE).

Japan reit etfs

The fund provides broad exposure to REITs listed on Tokyo Stock Exchange.

The fund is linked to the Tokyo Stock Exchange REIT Core Index, providing exposure to real estate investment trusts (REITs) listed on TSE.

The ETF may provide a suitable solution for income-seeking investors as REITs typically distribute over 90% of their taxable income to investors as dividends.

The ‘core’ index is a variation of the broader Tokyo Stock Exchange REIT Index which consists of all REITs listed on TSE.

In contrast, current REITs within the ‘core’ index must be ranked within the top 90% by market cap and top 97% by liquidity across all eligible issues to remain in the index, while eligible issues not currently in the index must be ranked in the top 70% by market cap to be selected for inclusion. Constituents within the index are weighted by market cap.

The index is reconstituted annually in June and rebalanced semi-annually in June and December.

As of the end of December 2018, a third (33.1%) of the index exposure was dedicated to office REITs, followed by diversified REITs (28.3%), industrial REITs (11.9%), and retail REITs (9.9%).

The largest holdings are Nippon Building (7.6%), Japan Real Estate Investment (7.0%), Nomura Real Estate Master (4.9%), and Japan Retail Fund (4.7%).

The fund comes with an expense ratio of 0.20%.

There are currently two other ETFs listed on TSE, from issuers Norinchukin Zenkyoren Asset Management and Mitsubishi UFJ Kokusai Asset Management, that provide exposure to the same core REIT index. The NZAM J-REIT Core Index ETF (2527 JP) and MAXIS J-REIT Core ETF (2517 JP) come with expense ratios of 0.24% and 0.25%, respectively.

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