Nomura Asset Management has introduced a triple play of S&P 500 ETFs on the Tokyo Stock Exchange.

Nomura has introduced the first S&P 500-linked ETF in Japan to incorporate ESG criteria.

Marketed under the firm’s NEXT FUNDS brand, two of the ETFs deliver ultra-low-cost regular or currency-hedged exposure to the S&P 500, while the third becomes the first S&P 500-based ETF in Japan to incorporate environmental, social, and governance (ESG) criteria.

The NEXT FUNDS S&P 500 (Unhedged) ETF (2633 JP) and NEXT FUNDS S&P 500 (Yen-Hedged) ETF (2634 JP) each come with a management fee of 0.077%.

The low price tags make the funds the lowest-cost in their category and fractionally cheaper than similar products offered by Mitsubishi UFJ Kokusai AM – the MAXIS S&P 500 US Equity ETF (2558 JP) and MAXIS S&P 500 US Equity JPY Hedged ETF (2630 JP) – which cost 0.078%.

The NEXT FUNDS S&P 500 ESG Index ETF (2635 JP), meanwhile, provides sustainability-screened exposure to the S&P 500 by tracking the S&P 500 ESG Index.

Companies with significant business activities linked to the tobacco and controversial weapons industries and those with weak adherence to the UN Global Compact Principles are excluded.

The remaining constituents are then assigned an ESG score based on SAM’s ‘Corporate Sustainability Assessment’. This score is either calculated directly by a company completing a comprehensive assessment (together with supporting documents), or – in the absence of this – by using publicly available information.

Those firms with the lowest ESG scores are removed whilst aiming to maintain 75% of the float-adjusted market capitalization of each Global Industry Classification Standard (GICS) Industry Group within the S&P 500.

The index is weighted by float-adjusted market capitalization and is reconstituted and rebalanced annually in April.

According to S&P Dow Jones Indices, the methodology provides an index that is aligned with socially responsible investing values while maintaining a risk-and-return profile similar to the parent index. It targets a tracking error of less than 100 basis points relative to the S&P 500.

The fund comes with a management fee of 0.143%.