Nikko AM to launch Japan ETF on human capital

May 11th, 2016 | By | Category: Equities

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Tokyo head-quartered Nikko Asset Management has announced it is set to launch an exchange-traded fund that tracks a Japanese equity index made up of firms taking proactive and efficient measure with their investments in capital expenditure and human capital.

Nikko AM launches new ETF on companies and employees

Nikko AM launches new ETF on companies being proactive on capital expenditure and human capital

The ETF will start trading on the Tokyo Stock Exchange on 25th May. It will track the JPX/S&P CAPEX & Human Capital Index, which has been developed by the Japan Exchange Group (JPX) and S&P Dow Jones Indices.

The JPX/S&P CAPEX & Human Capital Index consists of firms actively and efficiently engaged in capital expenditure and human capital investment. Specifically, the top 200 stocks are selected to be used in the index by first screening constituents of the TOPIX by “liquidity”, “creditworthiness”, and “stability”, and then assessing and ranking the remaining candidates based on three factors “capital expenditures growth”, “capital expenditures efficiency” and “adequacy of human capital investment”.

The Japanese government has been taking a proactive approach to companies in Japan in recent years to align them with Abenomics and therefore benefit from the potential economic growth in Japan. The Bank of Japan announced in December that it would provide support to companies that are “proactively making investment in physical and human capital” by spending JPY 300 billion a year in purchasing ETFs that track such companies. The Listed Index Fund Japanese Economy Contributor Stocks will invest in the constituent stocks of the JPX/S&P CAPEX & Human Capital Index, which is in congruence with the Bank of Japan’s supplemental measure.

The name, ticker and TER of the ETF were not available at the time of publication

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