Breaking News: Nomura AM Shakes Up Japan with Groundbreaking Launch of Active ETFs!

**Title: Exploring the Growth and Potential of Actively Managed Exchange-Traded Funds (ETFs)**

**Introduction**
Welcome to our comprehensive guide on actively managed exchange-traded funds (ETFs), an investment option that has gained significant popularity in recent years. In this article, we will discuss the latest news on ETFs, particularly focusing on two actively managed ETFs by Nomura Asset Management that received approval from the Tokyo Stock Exchange. These funds are expected to revolutionize the investment landscape in Japan. Additionally, we will explore the concept of actively managed ETFs in more detail, discussing their benefits, market trends, and potential for growth.

**1. The Rise of Actively Managed ETFs in Japan**
Active ETFs are a relatively new concept in Japan, with Nomura Asset Management leading the way in introducing and listing the country’s first two actively managed ETFs. Scheduled to begin trading on the Tokyo Stock Exchange, these funds offer investors a unique investment opportunity. The Next Funds Japan Growth Equity Active ETF and the Next Funds Japan High Dividend Equity Active ETF have already sparked interest due to their innovative approach to investing.

**2. Understanding Actively Managed ETFs and Their Investment Strategies**
Actively managed ETFs differ from their passive counterparts in that they are managed by professional portfolio managers who actively make investment decisions. These funds aim to outperform the market by strategically selecting stocks and other assets. The Japan Growth Active ETF evaluates companies based on their business, management, and financial strategies, while the Japan High Dividend Active ETF focuses on capturing stable dividends and flexible gains in stock prices.

**3. Benefits of Actively Managed ETFs**
Actively managed ETFs offer several advantages to investors. Firstly, they provide the opportunity to access professional portfolio management at a lower cost compared to traditional actively managed mutual funds. Additionally, the transparency of ETFs allows investors to have a clear understanding of the fund’s holdings and the rationale behind investment decisions. The potential for higher returns and diversification, coupled with the convenience and liquidity offered by ETFs, make them an attractive investment option.

**4. Global Trends in Actively Managed ETFs**
Although actively managed ETFs have gained significant traction in the United States and other countries, Japan has been slower to adopt this investment strategy. However, the recent approval of actively managed ETFs by the Tokyo Stock Exchange signifies a potential shift in the Japanese market. As the global market for active ETFs continues to expand, Japan stands to benefit from increased investor interest and growth in this sector.

**5. The Role of Actively Managed ETFs in Nippon Individual Savings Account (Nisa)**
The Nippon Individual Savings Account (Nisa) is a tax-exempt program in Japan that aims to support individual investors and facilitate the transfer of assets between generations. The introduction of actively managed ETFs aligns with the expansion of the Nisa scheme, providing investors with more options to grow their wealth. By diversifying their investment portfolios with actively managed ETFs, individuals can take advantage of the evolving financial landscape in Japan.

**6. Potential Market Growth and Implications**
As the number of active ETFs continues to rise, the global market is witnessing substantial growth. At the end of June, there were over 2,075 active ETFs managing approximately $583 billion in assets outside of Japan. With the introduction of actively managed ETFs in Japan, experts predict that the market will experience similar growth. This expansion will undoubtedly enhance investment options for investors and drive the trend from savings to asset formation.

**7. Expert Insights and Perspectives**
To gain a deeper understanding of actively managed ETFs, we turned to industry experts for their insights and perspectives. Masahiro Hotchi, head of ETF business development at Daiwa Asset Management, explained that active ETFs may initially receive a muted response due to their unique listing structure. However, Hotchi anticipates gradual growth with immense potential for these funds. With their vast experience and knowledge, investment professionals continuously monitor and adjust active ETF portfolios, potentially leading to higher returns for investors.

**8. Conclusion**
Actively managed ETFs have emerged as a powerful investment tool, providing individuals with easy access to professionally managed portfolios and the potential for higher returns. The approval and listing of actively managed ETFs in Japan mark a significant milestone in the country’s financial landscape. As the Nisa scheme expands and the trend towards asset formation accelerates, investors can benefit from the growth and potential offered by actively managed ETFs. We encourage you to explore these innovative investment options and discover the possibilities they hold for your financial goals.

**Summary**
In recent news, Nomura Asset Management has obtained approval from the Tokyo Stock Exchange to list the first two actively managed ETFs in Japan. The Japan Growth Equity Active ETF and the Japan High Dividend Equity Active ETF are set to start trading soon. These funds offer investors the opportunity to access professional portfolio management with lower costs and greater transparency. Actively managed ETFs provide potential market growth, aligning with Japan’s Nisa program and the trend towards asset formation. With global trends favoring actively managed ETFs and experts predicting substantial growth, it is clear that these innovative investment options have a promising future.

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Nomura Asset Management has obtained approval from the Tokyo Stock Exchange to list the first two actively managed exchange-traded funds in Japan.

The Next Funds Japan Growth Equity Active Exchange Traded Fund and the Next Funds Japan High Dividend Equity Active Exchange Traded Fund are scheduled to start trading on 7 September on the Tokyo Stock Exchange.

The two ETFs will require a minimum investment of approximately 2,000 yen per unit ($13.68), with annual management fees of 0.6875% and 0.5225%, respectively.

The Japan Growth Active ETF evaluates a company’s business model, management strategy and financial strategy based on research and analysis of individual companies.

This article was previously published by Ignite Asiatitle owned by the FT Group.

The vehicle, bearing the code 2083, invests mainly in stocks which are expected to achieve a high return over the medium to long term.

The Japan High Dividend Active ETF, meanwhile, is designed to achieve medium- to long-term total returns by capturing stable dividends, or income gains, and flexible gains in stock prices, or capital gains. The product has the code 2084.

The Tokyo Stock Exchange announced on June 30 that it had opened applications for domestic and foreign asset managers to list active ETFs in Japan. They have already taken off outside Japan, in particular in the United States.

According to Japan’s listing rules for active ETFs, the products will be subject to daily disclosure and no reverse active funds will be allowed.

Yamaji Hiromi, chief executive officer of JPX Group, said the rules ensure that all listed active ETFs are marketable or easy to understand for investors and transparent by providing adequate disclosure of each fund’s holdings and other information.

“We sincerely hope that many management companies both in Japan and abroad will enter the market,” he said.

Nomura AM requested the listing of its first two active ETFs in Japan on June 30.

In its statement announcing the launch of the first two active ETFs in Japan, Nomura AM cited data from consultancy ETFGI, which said the number of active ETFs outside Japan amounted to 2,075 vehicles managing combined assets of about $583 billion at the end of June.

“Similar growth is expected in Japan,” Nomura said.

“The introduction of actively managed ETFs will provide investors with more investment options at a time when the Nisa scheme is expected to be expanded and perpetuated and the trend from savings to asset formation is accelerating,” said Nomura AM.

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Nisa, which stands for Nippon Individual Savings Account, is a tax-exempt program for small individual investments first launched in Japan in early 2014. It is on its way to being expanded into a more effective and easier-to-use tool to support the activities. construction by individual investors in the country, while facilitating asset transfers from older to younger generations.

Masahiro Hotchi, head of ETF business development at Daiwa Asset Management, told Ignites Asia last year that he expected the first ETFs to go live in Japan would receive a “quiet” response.

Active ETFs will be hampered by the fact that, unlike mutual funds, ETFs don’t have a subscription period during which companies can attract investors, so the first promotion only happens after an ETF has been listed, he said .

Hotchi added that he expects active ETFs to “grow gradually” with “very large” potential.

Ignites Asia is a news service published by FT Specialist for professionals working in the wealth management industry. Trials and subscriptions are available at ignitesasia.com.

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