Nomura launches gender diversity ETF in Japan

May 15th, 2018 | By | Category: Equities

Nomura Asset Management has launched the NEXT FUNDS MSCI Japan Empowering Women Select Index ETF (2518 JP). Listed on the Tokyo Stock Exchange, the fund provides exposure to high quality Japanese companies that exhibit a commitment towards promoting and maintaining a high level of gender diversity among their workforce.

Japan gender diversity Nomura ETF

The ETF provides exposure to quality Japanese stocks from firms who are sector leaders in terms of gender diversity in the workplace.

Recent research has suggested that greater participation of women in the workforce may have benefits for the Japanese economy. As a result, the Japanese government has set out explicit goals to encourage women’s participation and promotion in the business world.

The fund tracks the MSCI Japan Empowering Women JPY Index which harnesses data from MSCI ESG Research in its construction methodology.

The construction process initially screens stocks according to the MSCI Quality Index methodology – stocks are assigned a composite z-score based on three fundamental metrics of quality: return on equity, debt to equity, and earnings variability.

The index then screens for companies that are classified in the top half of their respective GICS sector groups in terms of supporting women’s participation and advancement in the workforce and adopting diversity policies. These “Gender Diversity Scores” are based on a number of metrics including the percentage of women as new hires, the percentage of women in the total workforce, the difference in average employment years for female to male employees, the percentage of women in senior management, and the percentage of women as directors on the board.

The constituents of the index are weighted in proportion of their market capitalization, sector relative Gender Diversity Score and sector relative MSCI Quality Score.

The ETF charges a management expense ratio of 0.15%.

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