TOKYO : Japan's Simplex Asset Management said it will launch exchange-traded funds focused on undervalued stocks, including the first aimed at shares below book value, reflecting demand for exposure to the wave of corporate reform rallying Japanese markets.
Years of habitually conservative management and a build-up of cross shareholdings has resulted in many firms trading below the value of their assets less liabilities. Some 189 companies in the Topix 500 trade below book value, compared to 17 in the S&P 500, according to Simplex. The funds launch next week and are focused on the areas of the market where many investors see the most potential. One of the funds, Simplex PBR Improvement over 1x ETF, will contain about 500 stocks that average 0.7 times their book value.
"The time has come to launch these funds," said Hiromasa Mizushima, chief executive officer for Simplex Asset Management.