We wanted to make an ESG investment that takes sustainability aspects into account in the Japanese market. This is a systematic continuation of our investments in the ESG for the US, European and emerging markets. Timo Sallinen, Varma's head of listed securities, says that the number of exchange-traded ESG funds in Japan is not very high.
The fund invests in around 100 large and mid-sized Japanese companies selected according to strict sustainability criteria, with the liquidity of the shares also taken into account. Among the investors are the pharmaceutical company Takeda, the world's leading manufacturer of heat pumps, Daikin Industries, the conglomerate Hitachi, Toyota and the video game company Nintendo.
We believe that the growth prospects of the fund are in the long run because of the low emission industries selected for the fund. The companies that operate the most responsibly were selected within each industry. Sallinen believes that technology is an industry with future prospects that we believe in.
One of the largest asset management companies in Japan, Nomura, is managed by the fund managed by Nomura.
One of the largest asset management firms in Japan, Nomura Asset Management, has about EUR 467 billion in assets under management, according to the ETF NEXT FUNDS Solactive Japan ESG Core Index. The fund's index has been designed by Solactive to suit Varma's preferences.
The fund does not aim to track the Japanese market, as it does not cover all industries or companies in the broad indices. The tailored fund provides more active risk to us than a traditional broad market benchmark ETF, says Sallinen.