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Japan ETF Firms Must Get Creative as BOJ Offers $2.6 Billion

  • Don't expect ETFs tracking companies raising wages, Koll says
  • BOJ seen as right to jolt an industry still in its infancy
Pedestrians walk past the Bank of Japan headquarters in Tokyo, Japan.
Photographer: Kiyoshi Ota/Bloomberg
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As the Bank of Japan pushes the exchange-traded fund industry to design products that don’t exist, the biggest limit on what can be created is whether they work as investments.

So says WisdomTree Investments Inc.’s Jesper Koll, who’s part of the posse rushing to develop new ETFs after the central bank said it would allocate $2.6 billion a year to funds tracking companies “proactively making investment in physical and human capital.” Don’t worry too much about that definition, says Koll. It’s just a broad guideline, and investors can choose how they tackle the challenge, as long as the funds deliver good returns.