Tokyo Stock Exchange (TSE) has unveiled details of a new index – the Topix Small500 Index – that will go live on 9 October 2018. The index will tracks exposure to the small-cap segment of Japan’s Topix Index.

The new index will track exposure to the small-cap segment of Japan’s Topix Index.

The Topix is a leading reference for Japan’s equity market, consisting of all domestically listed stocks (over 1,800 companies) on the First Section of the TSE.

Thus far, TSE has already created several sub-indices for the Topix including the Topix 1000 (consisting of the 1,000 largest and most liquid stocks within the Topix), the Topix 500 (consisting of the 500 largest and most liquid stocks within the Topix), and the Topix Small (all stocks outside the Topix 500).

TSE defines the constituency of the new Topix Small500 as those 500 stocks from Topix Small that are also part of the Topix 1000. The index is weighted by free float-adjusted market capitalization.

There are a few ETFs already listed on TSE that target the mid and small-cap segments of the Japanese equity market, although these funds extend their scope beyond the First Section of the exchange to include stocks from the Second Section as well as the Mothers (Market of the high growth and emerging stocks).

The largest of these is the One JPX-Nikkei Mid Small ETF (1493 JP) from One Asset Management. The ¥9.7 billion ($87 million) fund tracks the JPX-Nikkei Mid and Small Cap Index. The index applies the concept of the JPX-Nikkei Index 400 to mid and small-cap equities by selecting 200 companies that focus on capital efficiency and investor-oriented management. The ETF has an expense ratio of 0.50%.