On Thursday, Rayliant brought its fourth ETF to market with the launch of the Rayliant SMDAM Japan Equity ETF (RAYJ ). The fund invests in mid- and large-cap companies domiciled in Japan or that have a significant business presence there.
Rayliant actively manages RAYJ. Japan’s Sumitomo Mitsui DS Asset Management (SMDAM) serves as the subadvisor and provides its home-country expertise to the portfolio managers. Additionally, the fund has an expense ratio of 0.72%.
“Rayliant is known for recognizing the importance of active management and local insights when it comes to investing in international markets, and this ETF supplements our quantitative expertise with SMDAM’s on-the-ground, active, proven fundamental approach to investing in Japanese equities,” Rayliant founder and CIO Jason Hsu commented.
“Rayliant’s ETF suite is designed to help investors optimize their exposure to both emerging and developed markets, and RAYJ’s direct, active Japan exposure provides investors with a valuable new tool to customize exposure and potentially improve outcomes in their international portfolios,” he added.
Japan ETF Can Include Futures Strategies
Mainly, RAYJ targets the common or preferred stock of the companies it selects for its portfolio. In addition to that, it can invest in derivatives, especially futures contracts. The prospectus cites their range of uses in RAYJ, including hedging, equitizing cash holdings and providing flexibility around share redemptions. RAYJ’s managers select holdings primarily for their above-average yields and their potential for delivering above-average total return, the document said.
The fund’s portfolio currently includes 29 securities. Among its top holdings are Disco Corp. at 5.9%, Toyota Motor Corp. at 5.7%, Mitsubishi Corp. at 5.4%, Mitsubishi UFJ Financial Group at 5.1% and Fast Retailing Co. Ltd. at 4.8%.
Rayliant’s three preexisting ETFs have a total of $129.4 million in assets under management. Its largest fund is the Rayliant Quantamental Emerging Market ex-China Equity ETF (RAYE ), with $46.2 million in assets.
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