Nomura taps retail market with Japan fund of funds

Nomura Securities has begun distributing its first Japanese fund-of-hedge-funds product targeted at Japanese retail investors. Called Nomura Japan Stock Market Neutral Fund 03-05, the fund invests in four underlying Japan-focused market-neutral funds.

The fund was launched at the end of May and is being managed by Nomura Funds Research and Technology (NFR&T), a subsidiary of Nomura Holdings, and has so far received ¥11.8 billion ($100 million) from retail investors.

"Many other hedge fund strategies have produced higher returns in the past, but they tended to have higher correlation with various markets. With low risk, the market-neutral strategy is expected to produce relatively stable returns," said an official at NFR&T.

The performance of the underlying funds is evaluated on a monthly basis, with the possibility of allocations being made into other funds independently researched by NFR&T, the official said.

While the move marks the firm's first Japan-focused fund-of-funds offering, Nomura has previously distributed two global fund-of-hedge-funds products to retail investors. In October last year, the firm launched the Nomura Multi-Strategy Fund, which invests in equity market-neutral, equity long/short, convertible bond arbitrage, bond arbitrage, merger and credit hedge strategies. In February, it began distributing the Goldman Sachs Global Currency Fund, which invests in foreign currency.