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Daiwa Asset Management is launching new Japan government bond funds that could rapidly expand the NISA user base, increasing demand for its products.
Long-term domestic bond yields are approaching 3% per annum, with the newly issued 10-year government bond yield reaching 2.875% on July 9, the highest level in about 30 years. This rise in interest rates has created a situation where, after accounting for currency hedging costs, domestic bond yields have become more attractive for institutional investors, and changes in investment behavior have been confirmed, such as a shift to net selling of foreign medium- to long-term bonds in 2026. For individual investors, asset managers are launching a series of new domestic bond funds, with Daiwa Asset Management expanding variations of Japan government bond funds in its "iFreeHOLD" series, which are designed to be held until maturity. These funds are eligible for the NISA growth investment framework, offering the advantage of receiving tax-free distributions, and could rapidly broaden the NISA user base, particularly among bank and post office customers who have traditionally held assets through savings deposits.
Daiwa Asset Management is launching new Japan government bond funds that could rapidly expand the NISA user base, increasing demand for its products.