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CSOP launches Nikkei 225 Index ETF: 3153.HK

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The CSOP Nikkei 225 Index ETF (3153.HK) has been listed on the Hong Kong Stock Exchange, with CSOP writing that this makes it the first Nikkei 225 Index ETF in Hong Kong. 

The firm writes that in order to track the performance of the Nikkei 225 Index , 3153.HK deploys a full replication strategy, with a listing price of about 78 Hong Kong dollars per unit, trading lot of 10, and management fee of 0.99 per cent of the ETF’s net asset value per year. 3153.HK has received an initial investment of USD13 million.

Nikkei 225 Index rose by 30 per cent in 2023, making Japan the highest returning stock market among major global markets, CSOP writes. At the beginning of 2024, it surged above 34,000 points, setting a new high since March 1990 (the period of the asset price collapse). 

With the endorsement of Warren Buffett, the “Oracle of Omaha”, Japan’s economy breaking free from the deflation curse, and the implementation of “price-to-book ratio (PBR)” reform of the Tokyo Stock Exchange, the Japanese stock market is attracting more investors’ attention than ever, CSOP writes.

In April 2023, Buffett visited Japan for the first time in 12 years, the firm reports.

“His holding company, Berkshire Hathaway, increased its stake in Japan’s five major trading companies to 7.4 per cent, which is the company’s largest investment outside the United States. His visit triggered the “Buffett Effect”, pivoted overseas investors’ focus on the Japanese stock market. In 2023, overseas investors net bought JPY6.3 trillion (about USD43.39 billion) of Japanese stocks and stock futures, of which the net inflow of stocks reached JPY3.12 trillion, shattered the record of net selling for three consecutive years, and established a new high since the market bull triggered by Abenomics in 2013.

“At the same time, the Japanese government stated in August 2023 that the 25-year fight against deflation may have reached an “inflection point”. The core CPI for the whole year of 2023 increased 3.1 per cent year-on-year, scoring a 41-year high. In addition, the Tokyo Stock Exchange introduced a new regulation in March 2023 that requires listed companies with a long-term PBR below one to announce specific improvement plans to shore up shareholder returns. Specific suggestions include urging companies to buy back shares, increase dividends in the short term, and improve profitability in the long term.”

CSOP Nikkei 225 Index ETF is the first ETF in Hong Kong tracking Nikkei 225 Index, and the firm writes, provides a convenient and low-cost trading tool for Hong Kong investors interested in the Japanese market. Nikkei 225 Index includes the 225 most representative stocks listed on the Prime Market of the Tokyo Stock Exchange. The constituents are selected based on their liquidity in the market and sector balance, including but not limited to industries like technology, consumer goods, industrial materials, and capital goods. The index is a net total return index, which means that it reflects the reinvestment of dividends or distributions, after deduction of any withholding tax. The index is denominated and quoted in JPY.

Ding Chen, CEO of CSOP comments: “As an ETF issuer trusted by investors in the APAC region, CSOP has always been committed to providing comprehensive and diversified investment products. At present, we manage 48 ETF and ETP products, asset classes across equity, fixed income, commodity futures, thematic investment, money market, and virtual assets. The first Nikkei 225 Index ETF listed in Hong Kong by us will further enrich our product line and provide investors with a flexible and transparent channel to invest in the Japan market.”

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