The BOJ has been encouraging firms to invest in human and physical capital to support an increase in wages and domestic consumption, whch would help to boost the Japanese economy, according to a Reuters report.
So far six such ETFs have been launched by firms such as Nomura, Daiwa, Nikko, BlackRock, DIAM and Mitsubishi UFJ Kokusai, the report said.
Seichiro Uchi, Tokyo-based managing director for index compiler MSCI, who was quoted in the report, said buying companies on the basis they spend a lot "just doesn't work".
"Companies with higher capital spending tend to underperform in the [equity] market. There are academic papers on it and everyone knows that in the industry," he said.
The performance of these ETFs, which have listed in the last two months, have been mostly in line with Japan's benchmark index the TOPIX, the report said.
An analyst said unless big institutional investors such as domestic pension funds are buying, the products would find it hard to gather assets.
The BOJ is allowed to hold a maximum of 50% of the assets of the themed ETFs.
If other investors remain cool toward these products, it could thwart the BOJ’s plan to increase the capacity of its ETF buying programme by JPY 300bn ($2.8bn) per year, the report noted.
Among the 59 ETFs invest in Japanese equities, only one has registered positive return year-to-date, according to FE Analytics. The top five performers as of this year versus their benchmark Topix index as shown below: