Nomura Asset Management has told investors that its NEXT FUNDS Nikkei 300 Index Exchange Traded Fund (code 1319) is trading well below the value of its underlying holdings. On October 5 the fund's net asset value (NAV) was ¥809.77 per unit, while its market price on the Tokyo Stock Exchange was ¥740.8, a discount of 8.52%, according to the manager's October 6 notice of a material divergence.
A seventh session beyond 5%
The gap has persisted. The notice says the discount has been 5% or more on seven consecutive business days since September 25. Tokyo Brief reported on the fund's NAV discount in August. What this notice adds is a dated run of daily figures and a deeper discount on the latest day.
| Date | NAV (¥) | Market price (¥) | Divergence |
|---|---|---|---|
| Sept 25 | 798.54 | 750.4 | -6.03% |
| Sept 28 | 795.55 | 750.4 | -5.68% |
| Sept 29 | 788.42 | 733 | -7.03% |
| Sept 30 | 802.44 | 746.4 | -6.98% |
| Oct 1 | 807.94 | 746.4 | -7.62% |
| Oct 2 | 799.67 | 740.8 | -7.36% |
| Oct 5 | 809.77 | 740.8 | -8.52% |
The discount was shallowest on September 28 at 5.68% and deepest on October 5. Over the seven days the NAV ranged from ¥788.42 to ¥809.77 per unit, and the market price from ¥733 to ¥750.4.
What Nomura says and advises
Nomura attributes the divergence to market supply and demand. It says the gap should close if trading picks up and supply and demand improve. That is the manager's expectation, not a commitment, and the notice gives no timetable.
The notice also carries a plain caution: investors buying or selling the ETF should pay close attention to the difference between NAV and market price. The notice does not give a cause beyond supply and demand, and it does not say what steps the manager may take.