Boost ETP has listed Europe’s first Japanese equity exchange-traded products on the London Stock Exchange, Boost TOPIX 1x Short Daily ETP (1JAS) and Boost TOPIX 2x Leverage Daily ETP (2JAL).
Following years of stagnation, momentum in Japanese equities has been building, with the TOPIX index rising 64 per cent (from 1 November 2012 to 11 July 2013), beating major DM and EM equity benchmarks.
The TOPIX outperformed the FTSE 100 by 24 per cent, the S&P 500 by 14 per cent, the DJ Euro STOXX 50 by 23 per cent and the MSCI Emerging Markets Index by 37 per cent (in USD, over the same period).
Year-to-date USD12bn has flowed into Japanese equity ETFs/ETPs, which represents a 22 per cent increase.
Unlike previous monetary stimulus efforts, the BoJ has never been so explicit in communicating its commitment to get rid of deflation. After announcing the doubling of its inflation target earlier this year, the BoJ reckons that the two per cent inflation rate will be attained through the doubling of monetary base to JPY270tn, of JGBs (Japanese government bonds) holdings to JPY190tn, and by more than doubling the average maturity of bond holdings from less than three years to about seven years.
The new ETPs provide short and leverage exposures to daily changes in the TOPIX TR index. For example, if the TOPIX rises by one per cent on a particular day, then Boost TOPIX 2x Leverage Daily ETP (2JAL) will rise by two per cent and Boost TOPIX 1x Short Daily ETP (1JAS) will fall by one per cent. However, if TOPIX falls by one per cent, then 2JAL will fall by two per cent and 1JAS will rise by one per cent.
