Tokyo-based Sumitomo Mitsui DS Asset Management is set to launch a new ETF providing low-cost exposure to the broad Japanese equity market.

Sumitomo Mitsui DS is to launch a low-cost TOPIX ETF on the Tokyo Stock Exchange.

The SMDAM TOPIX ETF (2557 JP) is scheduled to start trading on the Tokyo Stock Exchange (TSE) on 16 December 2019.

It will come with a management fee of just 0.07%.

The fund will track the TOPIX Index, a leading reference for Japan’s equity market, which consists of all domestically listed stocks (over 1,800 companies) on the First Section of the TSE. Constituents are weighted by float-adjusted market capitalization.

The largest sectors represented in the index are industrials and consumer discretionary with weights of 22.8% and 17.9%, respectively, followed by information technology (11.3%), financials (10.4%), and consumer staples (8.9%).

At the stock level, the index is fairly well-diversified with the largest individual constituent being Toyota at 3.6%, followed by Sony (1.8%).

At just 7 bps per annum, the fund will be one of the cheapest ETFs in Japan to track the TOPIX. Currently, there are another seven TOPIX ETFs listed on TSE with most charging management fees between 0.08% and 0.11%.

The cheapest fund is the iShares Core TOPIX ETF (1475 JP) which comes with a management fee of 0.06%. It houses ¥320 billion (approximately $3.0bn) in assets under management.