Source launches first ETF on Nikkei 400 in Europe

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London, 15th September 2014: Source, a leading provider of Exchange Traded Products (ETPs), is pleased to announce the launch of the Source JPX-Nikkei 400 UCITS ETF. The ETF provides exposure to the JPX-Nikkei 400 TR Index, an innovative new benchmark for the Japanese equity market.

Revitalising its equity market is a key part of the Japanese government’s growth strategy. In recent history, Japanese companies have typically held large cash reserves and delivered low shareholder returns relative to other developed markets.  The JPX-Nikkei 400 Index provides broad exposure, across the large-cap, small-cap, growth and innovation segments of the Tokyo Stock Exchange. However, unlike other benchmarks, it focuses on companies with the potential to generate shareholder value.  Developed by Nikkei and the Japan Exchange Group, the index selects stocks on the basis not only of size, but also return on equity, operating profit and corporate governance.

“This index has strong investor appeal,” says Michael John Lytle, Chief Development Officer at Source. “It comprises companies that use their capital efficiently and meet global standards of corporate governance.”  Since its launch in January 2014, the JPX-Nikkei 400 Index has already been adopted as a benchmark by major institutional investors, such as Japan’s Government Pension Investment Fund. “There are also signs that some companies are modifying their behaviour to ensure inclusion in the index,” Lytle continues. “We have seen an increase in share buybacks and dividend payments, and more companies appointing external directors.”