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Finance

Goldman enters Japan's ETF market with tech-themed funds

Move seeks to peel investors away from higher-cost active managers

Goldman Sachs Asset Management is making a foray into Japan's market for exchange-traded funds.   © Reuters

TOKYO -- Goldman Sachs Asset Management will market exchange-traded funds that track stocks on technology themes to investors in Japan, aiming to capture money shifting away from higher-cost mutual funds, Nikkei has learned.

The five ETFs are listed in the U.S. and focused on trends that the asset manager has identified as having a transformative effect on the economy, such as innovations in data and finance.

The Goldman unit has applied to Japan's Financial Services Agency to start sales of the ETFs, which could happen as early as this month.

The move comes amid a renewed debate in Japan over saving for retirement at a time of rising demographic strain on the nation's pension program. Japan's government has sought to encourage the flow of household assets to the stock market.

Actively managed investment trusts based on themes such as artificial intelligence and robots have proved popular in Japan. In the U.S., inflows into ETFs -- which trade like stocks -- continue to grow while active funds suffer.

"We see a possibility that a shift from active funds to ETFs will continue going forward," said Shunichi Yamada, a managing director at Goldman Sachs Asset Management.

U.S. startup Motif partnered with the Goldman unit to find the stocks with the greatest exposure to tech trends, based on data such as corporate disclosures, research papers and patent filings.

Automated stock selection has kept costs for the ETFs low. Thematic investing, a leading strategy for active asset management, typically involves in-depth research by fund managers.

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