SuMi Trust has launched a fund to focus on entrant companies to the newly launched JPX-Nikkei 400 index.

Tokyo-headquartered Sumitomo Mitsui Trust Group has launched the Japan Quality Growth Fund to meet “overwhelming investor appetite” for the new JPX-Nikkei 400 index of Japan’s most profitable and shareholder friendly companies.

The fund, which comes under the Ireland-domiciled SuMi Trust Investment Funds umbrella, is aimed at institutional investors in Europe and the Middle East. It will adopt a long-term bottom-up stock picking strategy, investing in a portfolio of around 30 companies with a focus on entrants to the newly launched index. The fund will target an annual excess return of 5 per cent against the index.

It will be run by Tatsuya Suzuki, who has 20 years' industry experience and currently serves as portfolio manager for SuMi Trust’s Japanese Equity Growth Fund. The fund will be available in Japanese yen with a minimum investment of JPY 10 million ($81,114).

“Since the launch of Abenomics and the introduction of corporate governance reforms in Japan, we have seen increased investor appetite for companies focused on improving their profitability and shareholder relationships,” said SuMi Trust's managing director, Hisaya Kambayashi.

Abenomics refers to prime minister Shinzo Abe’s strategy to revive Japan’s economy, based on three “arrows”: monetary stimulus, fiscal pragmatism and structural reform.

“With a heightened emphasis on quality, the JPX-Nikkei 400 is shining a spotlight on those companies with high returns and good governance procedures which promote stronger growth,” said Kambayashi.

“Through our highly skilled investment team and the expertise of our on-the-ground Japanese equity analysts, the Japan Quality Growth Fund gives investors direct access to this new breed of Japanese companies.”

The fund will also be launching additional share classes in sterling, euro and US dollars to cater to international demand, the group added.