FTSE names Japan chief, mulls bond indices
After nearly a decade running FTSE’s Japan office, Paul Hoff retired from the index provider last week and has been succeeded by funds industry veteran Yuji Ogino.
Ogino was general manager at Tokio Marine Asset Management from January 2009 to March this year, and remains in Tokyo to head development of FTSE’s business as director of Japan. He started in the new role on Monday (July 2) and reports to Jessie Pak, Hong Kong-based managing director for Asia.
Ogino had looked after the link between the investment team of UK-based Threadneedle Asset Management and the marketing team at Tokio Marine AM. Before that, he was chief investment officer at Meiji Dresdner Asset Management and also spent 25 years at Mitsui Trust & Banking group.
Following his departure from Tokio Marine, Ogino's duties have been taken on by his former boss on the investment team, Kazuhiro Honjo, and another ex-colleague.
Hoff had run the Tokyo office of FTSE since it opened in 2003. Before that, he spent close to 18 years at HSBC in Tokyo as a director in the investment bank. There he helped build a Japanese equity, derivatives, capital markets, M&A, US Treasury and international equities business.
Pak says FTSE aims to grow its Japanese business by expanding its base of institutional and asset-management firm clients. Few structured products are sold in Japan, she notes; the focus is very much on indexed, passive portfolios and exchange-traded funds, and on benchmarking for actively managed funds and segregated accounts.
FTSE is also looking to promote currency-based products in Asia. For example, the firm launched World Parity Unit (WPU) globally in February and has been conducting promotional initiatives. These included a seminar in Tokyo attended by nearly 80 individuals from a range of institutions.
(WPU is a stable global currency unit that aims to reduce currency and inflation risk over the long-term. It is constructed from a basket of developed currencies, emerging currencies and storable commodities.)
FTSE does not yet offer any bond-referenced indices outside the UK, but is considering developing products with non-UK underlyings, and might launch something as early as next year.
“The challenge for creating fixed-income indices is obtaining prices,” says Pak. “We are consistently getting the message that the market would like more transparency [in this regard].”
But she stresses that, in terms of product development, FTSE’s main focus is on equity indices in Japan, wider Asia and emerging markets.
Meanwhile, there has been growing interest over the past 18 months particularly in emerging-market (EM) debt and equities in Japan, says Pak. A rising number of institutions are considering using fundamental weightings – an area of specialism for FTSE – for EM investments. Many argue that traditional market-cap weightings under-represent emerging markets in global indices.
The first funds based on FTSE alternatively weighted indices launched in Japan in 2007. The company has since licensed all the country's trust banks and several asset managers to use either the fundamentally weighted FTSE Rafi or wealth-weighted FTSE GWA indices.
"Initially, the funds were primarily based on Japan or developed ex-Japan, but we have seen a number of new funds launched based on emerging markets," a FTSE spokesman tells AsianInvestor.
These include products from Nissay Asset Management, which launched a fund based on FTSE Rafi Emerging last year, and Daiwa Asset Management, which launched a fund targeting defined-contribution pension plans in 2010 (also based on FTSE Rafi Emerging).
Perhaps the highest profile example in Japan of rising demand for EM exposure is the $1.4 trillion Government Pension Investment Fund this week selecting six fund houses – Invesco, Nomura AM, Nomura Funds Research and Technologies, Mizuho AM, Sumitomo Mitsui AM and Lazard AM – for its first EM equity investments.