--- title: Japan Enhanced Index Equity | Nikko AM Asia description: Aims to generate out performance over the medium to long term, using a proprietary quantitative model based on three distinct components that estimate expected alpha from individual stocks. --- [![NikkoAM Logo](https://global.nikkoam.com/hubfs/SGWebsite/images/logo/nikkoam_logo.png)](https://global.nikkoam.com/?hsLang=en) [About Us](https://global.nikkoam.com/about-us?hsLang=en) [Sustainability](https://global.nikkoam.com/sustainability?hsLang=en) [Strategies](https://global.nikkoam.com/strategies?hsLang=en) [How to Invest](https://global.nikkoam.com/how-to-invest?hsLang=en) [![nikkoam_logo](https://global.nikkoam.com/hubfs/SGWebsite/images/logo/nikkoam_logo.png)](https://global.nikkoam.com/?hsLang=en) - [About Us](https://global.nikkoam.com/about-us?hsLang=en) - [Sustainability](https://global.nikkoam.com/sustainability?hsLang=en) - [Strategies](https://global.nikkoam.com/strategies?hsLang=en) - [How to Invest](https://global.nikkoam.com/how-to-invest?hsLang=en) ##### Welcome to Nikko AM To help us get you to the appropriate site, please tell us a little about yourself Your location Select Your Investor profile Select **You must read and agree to the following information before proceeding. The information on this website is intended solely for use by residents. The funds mentioned are Singapore registered funds approved for sale or purchase in Singapore. By clicking “I Accept” below, you are representing and warranting that: (i) you are an and you are either resident in or the applicable laws and regulations of your jurisdiction allow you to access the information on this website; and (ii) you have read and consent to the terms set out in Nikko Asset Management Asia Limited's Personal Data Protection Disclosure (accessible at [www.nikkoam.com.sg/personal-data-protection-disclosure](https://global.nikkoam.com/personal-data-protection-disclosure?hsLang=en)), which are hereby incorporated by way of reference into this disclaimer.** **How we use cookies** Cookies are small pieces of data stored on your device that help us to remember who you are and show you content that is relevant to your interests. 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Suggested Results [About us - We are Nikko AM](https://global.nikkoam.com/about-us?hsLang=en) [Sustainability - Invest in sustainability and its opportunities](https://global.nikkoam.com/sustainability?hsLang=en) [Funds - Invest in Nikko AM funds](https://global.nikkoam.com/funds?hsLang=en) [Insights - Investment insights by our thought leaders](https://global.nikkoam.com/insights?hsLang=en) [Strategies - Our approach in investment strategies](https://global.nikkoam.com/strategies?hsLang=en) [Back to Strategies](https://global.nikkoam.com/strategies?hsLang=en) ![sustainability-image-mobile](https://global.nikkoam.com/hubfs/SGWebsite/images/vector/sustainability-image-mobile.svg) ![illustration_strategies](https://global.nikkoam.com/hubfs/SGWebsite/images/vector/illustration_strategies.svg) Equity Strategies # Japan Enhanced Index Equity The Japan Enhanced Index Equity strategy aims to generate out performance over the medium to long term, using a proprietary quantitative model. Investment Philosphy The Japan Enhanced Index Equity strategy aims to generate out performance over the medium to long term, using a proprietary quantitative model based on three distinct components that estimate expected alpha from individual stocks. ![](https://global.nikkoam.com/hubfs/SGWebsite/images/vector/strategy_key_characteristics.svg) Key Characteristics - Investment opportunities arise where stock prices deviate from theoretical values - Proprietary quantitative model - Opportunistically invests across all market caps - 3 independent sources of expected returns It is the combination of the three components within the proprietary "N.ALPHA" model which enables the investment team to calculate the expected alpha of individual stocks accurately. The effectiveness of N.ALPHA has been verified by long-term simulations, as well as a variety of stress-tests, which may obtain stable excess returns over the medium and long-term.   Types of Long-Term Simulations & Stress-Tests - The **Risk Premium Model** estimates rises in future theoretical stock prices - The **Mis-Pricing Model** estimates the difference between theoretical and actual stock prices - The **Behavioural Finance Model** estimates stock prices based on investor behaviour Our Investment Process The investment process is supported by "N.SERIES", a proprietary series of investment tools used to estimate credit risk, transaction costs, risk control and performance analysis. This series enables effective portfolio construction by responding flexibly to the investment team's needs and changing markets. Portfolios are constructed by inputting the expected alpha of individual stocks from N.ALPHA into Nikko AM's proprietary optimisation model. 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