Nomura Merging "¥1-Trillion" Underperforming Fund

Nomura Asset Management is set to merge an underperforming equity investment trust, once known as the “¥1 trillion fund” due to its size, with one of the firm’s flagship products after years of weak performance, Nao Sano reported for Bloomberg News.

The company is set to align the investment policy of the Nomura Japan Equity Strategy Fund with that of the Nomura Japan Open. I Photo: Nomura

The asset manager submitted a filing to align the investment policy of the Nomura Japan Equity Strategy Fund with that of the Nomura Japan Open after consulting with stakeholders.

The strategy fund was established in February 2000 and reached a peak of ¥1.167 trillion ($7.8 billion) in net assets by May of that year, benefiting from tech-sector investments during the IT bubble.

However, its performance has declined significantly over the years, underperforming the Topix stock index in four of the past five years.

Additionally, the fund’s expense ratio—the cost to investors—exceeded the industry median at 2.08%, compared to the sector median of 1.65%. As a result, the fund's net assets have dwindled to just 5% of their peak, standing at ¥55.7 billion.