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Nomura Asset Management has received 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 Next Funds Japan High Dividend Equity Active Exchange Traded Fund are scheduled to begin trading on the Tokyo Stock Exchange on September 7th.

The two ETFs require a minimum investment of around 2,000 yen per share (US$13.68), which incur annual management fees of 0.6875 percent and 0.5225 percent, 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 Ignites Asia, a title of FT Group.

The vehicle with the identifier 2083 invests primarily in stocks that promise high returns in the medium to long term.

The Japan High Dividend Active ETF, on the other hand, is designed to provide medium to long-term total returns by generating stable dividends or income gains and flexible share price gains or capital gains. The product has the code 2084.

The Tokyo Stock Exchange announced on June 30 that it has opened applications for domestic and foreign asset managers to list active ETFs in Japan. Outside of Japan, particularly in the US, they are already on the rise.

Under Japanese active ETF listing rules, products are subject to daily disclosure and reverse active funds are not permitted.

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

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

Nomura AM applied to list its first two active ETFs in Japan on June 30.

In its statement on the launch of the first two active ETFs in Japan, Nomura AM cited data from ETF advisory firm ETFGI that showed the number of active ETFs outside Japan at the end of June was 2,075 vehicles, managing total assets of around $583 billion.

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

“The launch of actively managed ETFs will provide investors with more investment opportunities at a time when the Nisa program is set to expand and sustain and the shift from saving to wealth is accelerating,” said Nomura AM.

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Nisa, short for “Nippon Individual Savings Account,” is a small individual investment tax exemption program that was first introduced in Japan in early 2014. It is intended to be expanded and become a more effective and user-friendly asset preservation tool for construction projects by individual investors in the country, while facilitating the transfer of wealth from older to younger generations.

Masahiro Hotchi, ETF business development manager at Daiwa Asset Management, told Ignites Asia last year that he expected the first active ETFs in Japan to meet a “quiet” reaction.

Active ETFs are 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 comes after an ETF has been listed, he said.

Hotchi added that he expects active ETFs to “incrementally grow” and have “very big” potential.

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

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