The Daiwa FTSE Shariah Japan 100 has been jointly launched by Daiwa Asset Management (Singapore) and Singapore Exchange. It will track the performance of the FTSE Shariah Japan 100 Index , which is designed to represent the return of the largest and most liquid listed companies in Japan that comply with Islamic legal principles.

The top 10 holdings of the fund are Toyota Motor, Canon, Nintendo, Matsushita Electric, Takeda Pharmaceutical, Mitsui, Komatsu, Mitsubishi Electric, Nippon Steel and DTT Docomo.

According to Tokyo-based Michihito Higuchi, president and chief executive of Daiwa Asset Management, the parent company of the Singapore entity, the fund aims to serve as a proxy to Japan's growth prospects while being a means of gaining exposure to shariah-compliant stocks. The fund is Daiwa's first ETF in Singapore.

Chew Sutat, SGX executive vice-president and head of development, says demand for shariah-compliant funds in Asia has been rising strongly on the back of increasing interest from Islamic investors from the Middle East. The Daiwa fund brings the total number of SGX-listed ETFs to 19 and expands on its current Asian offerings.