Amid all the fuss surrounding ETFs and the dangers they may pose to the financial system, Nomura Asset Management Co. has announced today that it will halt subscription orders for its Next Funds Nikkei 225 Leveraged Index ETF and two other funds (Next Funds Nikkei 225 Double Inverse Index ETF and the Next Funds Nikkei 225 Inverse Index ETF) from Friday amid liquidity concerns.
According to Nomura‘s press release on the matter:
“The temporary suspension has been determined, considering the current situations of fund management including the liquidity of the underlying Nikkei 225 futures and the total assets under management of three ETFs, etc.”
Bloomberg notes that the Nikkei 225 ETF has become one of the biggest players in Japan’s futures market recently, which has sparked concerns that the fund’s trades are influencing the market.
The ETF’s assets under management have swelled over the past five months to 734 billion yen ($6.2 billion), roughly double what they were back in April. The Nikkei 225 has fallen around 13% from this year’s peak in June....MORE