ETF Trends
ETF Trends
  • Bank of Japan has released details on what types of new ETFs it wants financial companies to create
  • Companies that increase capital or research spending will be eligible for purchases
  • Additionally, funds that track firms boosting staff numbers, wages and investments in employee development will also meet BOJ standards

The Bank of Japan has outlined what types of companies it is prepared to invest billions of dollars in. Investors can also ride the wave through targeted Japan country-specific exchange traded funds that meet certain criteria.

The BOJ has released details on what types of new ETFs it wants financial companies to create as the central bank prepares to invest $2.6 billion per year in equities, Bloomberg reports.

Specifically, companies that increase capital or research spending will be eligible for purchases then the Japanese central bank begins its program in April. Additionally, funds that track firms boosting staff numbers, wages and investments in employee development will also meet BOJ standards.

The BOJ originally outlined its purchasing plans in December, along with a targeted pool of cash of 3 trillion yen, or $26.5 billion, it already spends per year on broader funds. The central bank hoped that its huge investments may encourage Japanese firms to invest for growth and bolster wages, instead of just sitting on piles of record cash.

“It goes beyond hard quantitative measures and opens the door up to a qualitative assessment,” Jesper Koll, chief executive officer for Japan at WisdomTree Investments Inc., told Bloomberg. “Everyone understands that just because you hire more doesn’t mean you’re a good investment. By adding qualitative elements, the BOJ are aligning themselves with investors and the need for better returns.”

Showing Page 1 of 2