Mizuho Financial Group Inc’s asset management unit is planning to launch an active fund specialising in large-cap Japanese stocks by year end, betting investors that have been flocking to foreign equity index products will return to the home market.

Asset Management One Co aims to expand the size of the investment trust to ¥500 billion (US$3.4 billion) over the next five to 10 years, the company’s president, Noriyuki Sugihara, said in an interview. He said the fund will invest in about 50 large-cap shares.

The Japanese government is trying to get individuals to shift more of their funds from savings to investments to help boost the financial holdings of one of the world’s oldest populations. The total net asset value of publicly offered investment trusts in Japan reached a record high at the end of June, driven by the brisk stock market and the popularity of new tax-free investment accounts called Nisa. But those funds have focused heavily on foreign equity investment trusts, with limited demand for products targeting Japanese shares.

Sugihara said that very few equity funds in Japan specialise in large-cap stocks now. But with policymakers pushing companies to boost their shareholder valuations, “an environment in which investing in Japanese equities over the medium to long term is conducive to asset building” is emerging, he said.

The company plans to start managing the fund with its own money and solicit investors after building up a track record of investment.

  - Bloomberg