Frankfurt based index providers, Solactive writes that mutual funds continue to enjoy widespread popularity in Japan due to relatively low costs, accessibility, and convenience through tradability in Japanese Yen.
In addition, the expansion of the Nippon Individual Savings Account (NISA) scheme scheduled for next year aims to further encourage a shift from savings to investments. The scheme targeting smaller tax-exempt investments by individuals is considered to be an effective tool for mid-to-long-term asset accumulation and, therefore, might also be an important means by which to address the needs of an ageing society. The Japanese government under Prime Minister Fumio Kishida aims to double the number of NISA accounts to 34 million and increase the size of assets invested through them to JPY56 trillion (USD370 billion) over five years.
Against this backdrop, recognising the vast potential in the country, Nissay Asset Management, one of Japan’s major players and a member of the Nippon Life Group, has launched the Nissay S US Equity 500 Index Fund, which is benchmarked against the Solactive GBS United States 500 Index. The new Nissay-S series aims to provide highly cost-competitive index funds within the industry, and the new US 500 Index Fund reflects this by leading the US equity category in terms of cost-efficiency with a 0.05775 per cent management fee.
The Solactive GBS United States 500 Index is part of Solactive’s flagship Global Benchmark Series (GBS) and tracks the performance of the largest 500 U.S. companies. As such, the index represents a well-diversified portfolio of larger US stocks across a wide range of sectors, with the expectation of participating from the growth of the US economy.
Steffen Scheuble, CEO at Solactive, says: “Japan has been facing prolonged periods of low-interest rates, and traditional savings accounts have offered minimal returns. Despite this, a certain wariness about potential losses, perhaps not too different from us Germans, has kept many Japanese from investing their savings into higher-yielding assets. With our low-cost core benchmark offering, and other innovative index products, we hope to be able to contribute to an increasing investment culture, adding value to the capital accumulation endeavors of Japanese households and beyond. In this context, we are delighted to have found a new partner in Nissay Asset Management, who shares our spirit of providing high-quality products at disruptive prices – and we sincerely thank them for their trust.”
Nissay Asset Management writes: “In Japan, the proportion of risk assets in households has remained significantly lower compared to that of the Western countries due to a high savings propensity among the population. However, in recent times, there has been a noticeable increase in awareness towards asset accumulation, particularly among the younger generation. Nissay S US Equity 500 Index Fund represents a cost-effective fund suitable for long-term investment and strongly serves to support individual investors in their long-term investment accumulation. Additionally, it is also expected to contribute to the diversification of benchmarks in Japan through the introduction of a new index provided by Solactive.”