NASDAQ in Talks to List QQQ ETF in Japan

Includes: QQEW, QQQ, QTEC
by: IndexUniverse
Financial News reports that the NASDAQ Stock Exchange is in talks with its Japanese equivalent, the Jasdaq, about listing the Nasdaq-100 ETF (QQQQ) on the Japanese exchange. The fund is already available to institutional investors in Japan, but a dual listing would significantly broaden access to the fund, particularly among retail investors.

The Nasdaq has been working hard recently to reinvigorate growth in its flagship QQQ ETF, as asset growth has slowed considerably over the last year, with net assets appearing to level off at the $17 billion mark. The fund is no longer the second largest ETF in the world, a title it held for most of the past decade, having the $29 billion iShares MSCI EAFE Index (EFA.

To help jumpstart growth, the Nasdaq partnered with First Trust to launch equal-weighted (NASDAQ:QQEW) and “tech-only” (NASDAQ:QTEC) versions of the popular benchmark in the U.S. More recently, ProShares launched leveraged, short and short-leveraged ETFs tied to the index. The group also introduced a “direct investment” program that allows U.S. investors to purchase the ETF without a commission.

The Japanese partnership would follow the Nasdaq’s long-standing strategy of growing the overseas asset base for the fund. Nasdaq already lists the QQQQ on five European exchanges (in the UK, Ireland, Germany, Belgium and Italy), under the brand “EQQQ”; through December 2005, those fund had assets $315 million. The fund also trades in Mexico, where it was the first foreign ETF to trade in any Latin American country.

The Jasdaq listing may be part of a broader strategy by the Nasdaq to increase its presence in Asia. The New York Stock Exchange is rumored to be in talks with the Tokyo Stock Exchange about a partnership, and there are rumors that the Nasdaq is seeking a closer relationship with the Jasdaq as a countermove. The consensus is that a stronger Japanese presence could open the doors to China, and the potential new listings and trading growth available in that market.

QQQQ 1-yr chart:

QQQQ 1-yr chart