Nikko Asset Management – Best APAC Equity ETF Manager
Nikko Asset Management is positioning itself to be Asia’s premier global asset manager, and similar to other leading global players, the Tokyo-based firm excels at meeting sophisticated investors’ needs for true alpha-producing active strategies alongside cost-effective beta products.
But what sets Nikko Asset Management apart from its global peers is its positioning in Asia, the world’s most dynamic economic region. A commitment to running its business according to the most rigorous global standards means that among non-western firms, Nikko Asset Management stands shoulder-to-shoulder with asset managers who are often considered to be best in class.
“We bring a differentiated investment approach as our vantage point looks from east to west, whereas a lot of our competitors’ orientation is grounded in looking west to east,” says Geoffrey Post (pictured), Head of International Product Development. “Our ETF offering, furthermore, is based on the three ‘Es’: Experience, Efficiency and Expertise.”
Few can boast the same experience and heritage as Nikko Asset Management. The firm has been running retail and institutional money for more than 55 years. It was the first Japanese fund management company to launch a passive mutual fund in the mid-1980s and one of the founders of the Japan ETF industry in 2001.
Nikko’s book of indexed strategies has USD30bn in AuM while its ETF book has USD17bn in assets. The firm has a wide range of Japan equity ETFs of which the TOPIX Fund (USD7.5bn) and Nikkei 225 Fund (USD9bn) are the flagship products.
“Our investment team seeks to track the respective indices as closely as possible while minimising frictional costs to ensure efficiency. In Japanese equities we bring deep local market expertise to deliver high quality, low cost products. Those are important considerations when speaking to investors,” comments Post.
The third ‘E’, expertise, is built on the resources and skills of Nikko Asset Management’s index investment team in Tokyo, complemented by a broad range of investment capabilities across Asia.
To grow the business, the company is focusing its efforts on attracting investors across Europe and Asia, helped by the introduction of innovative products such as the JPX Nikkei Index 400 ETF, which launched in January 2014 and already has USD290m in assets.
“This physically invested ETF that trades when the Japanese stock market is open is an example of the benefits of local access for investors. Our deep knowledge of the local market is invaluable in explaining how corporate governance and stewardship reforms are changing the nature of the stock market. People want to ask questions and learn about these developments, and that represents a great opportunity for us,” says Post.
The UK team totals 52 people. London is home to the award-winning Fixed Income and Currency team of fund managers and analysts investing in global developed and emerging market strategies, while Edinburgh is home to the Global Equity investment team.
“On one hand we are bringing Asia to Western investors. On the other, our UK based Equity and Fixed Income teams are managing strategies for global clients. That dynamic is critical for a well-balanced global asset management business,” comments Alex Shaw, Head of EMEA Business Development