Nomura ‘1-Trillion-Yen’ Japan Fund Drops Below 100 Billion Yen

Nomura Asset Management Co.’s once-dubbed “1-Trillion-Yen Fund” fell yesterday to its lowest level since being introduced in 2000 at the height of a bubble in information-technology stocks.

The “Nomura Japan Stock Strategy Fund” saw its net asset value fall to 99.7 billion yen ($1.15 billion) as of July 22 as individual investors shifted their cash into foreign equities, said Chiho Shimada, chief editor of Toshi Shintaku Jijo, an investment magazine. Dividend yields for Australia’s S&P/ASX 200 Index and Euro STOXX 50 Index are more than 4 percent compared with about 1.7 percent for the Nikkei 225 Stock Average. The Nikkei has declined 10.6 percent this year.

“The poor performance of Japan’s stocks is one of the reasons for the unpopularity of the fund,” said Shimada. “Another is that Japanese stocks have low distribution rates because of low dividend yields. People are investing for monthly returns.”

The fund started in February 2000, just before the information technology bubble burst. It attracted 792.4 billion yen from investors before it began operation.

Sales of Japanese stocks funds have been falling, according to the Investment Trust Association, Japan. Domestic equity funds at open-end investment trusts posted 13 consecutive months of net asset outflow as of June as redemptions and cancellations exceeded sales, the association’s data show.

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