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Finance

Japan's Daiwa invests $120m in US ETF provider Global X

Brokerage looks to boost lineup of thematic funds in Asia

A Tokyo branch of Daiwa Securities, Japan's second-largest brokerage.   © Reuters

TOKYO -- Daiwa Securities Group, the parent of Japan's second-largest brokerage, will invest $120 million in Global X, a U.S.-based issuer of exchange-traded funds, with an eye to developing themed ETFs for Japanese investors.

Daiwa will buy new bonds issued by Global X that will be convertible to common stock in five years. Daiwa would gain a minority stake post-conversion and plans to name a director to the company's board.

The move aims to tap into the rapidly growing market for ETFs, which have gained popularity worldwide as a low-cost, highly liquid investing option.

Global X specializes in ETFs based on specific investment themes. It offered 72 funds at the end of 2019 and had $12.4 billion in assets under management. The company is now wholly owned by South Korea's Mirae Asset Global Investments, which acquired it in a 2018 deal.

Daiwa formed a Japanese joint venture with Global X last year that aims to list Japanese-stock ETFs on the Tokyo Stock Exchange by mid-2020.

With this deal, the brokerage looks to draw on Global X's know-how to develop Asian-stock-themed ETFs, hoping to draw Japanese customers and boost its own assets under management.

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