NOMURA NOMURA ASSET MANAGEMENT

Announcement regarding the proposed amendment of the terms and conditions in the trust deed of NEXT FUNDS Nifty 50 Linked Exchange Traded Fund (Code:1678) and setting of the record date for unitholder's resolution

Nomura Asset Management Co., Ltd. has announced that we would propose a significant amendment of the terms and conditions in the trust deed of the NEXT FUNDS Nifty 50 Linked Exchange Traded Fund (hereinafter "The Fund") and that we have fixed February 9, 2018 as the record date for the written resolution by unitholders in compliance with the relevant rules. Those recorded unitholders as of the record date are entitled to vote on the resolution.

<Brief summary of the amendment>
The objective of The Fund is to aim at investment performance linked to the JPY-converted Nifty 50 Index.
It is stated in the terms and conditions that there are either methods to be employed for investment: One is to invest in the index linked securities (bonds), and the other is to invest in cash stocks and the stock price linked securities (bonds).
This time we would propose to amend the terms and conditions by adding another new method to utilize derivatives and other instruments, and also by implementing the combined use of these three methods, so that we can manage The Fund more efficiently. The new way of investment would include the stock index futures, foreign exchange futures, and foreign exchange forward contracts for the fund management.
<Reasons of the amendment>
The major reasons for the amendment include the fact that improved liquidity in the Nifty 50 Index futures has enabled us to put it in practice for the fund management, and that we could expect for more cost conscious fund management through this new way of investment.
Consequently, we expect that we could manage The Fund more efficiently and we could diminish the difference of the performance between NAV and the benchmark index.
<Notification>
The details of the contents and the procedures for the amendment of the terms and conditions will be notified by March 2, 2018 by the documents sent to the recorded unitholders, who are entitled to vote on the proposed amendment.

ETF Investment Risks

ETFs invest primarily in securities that are subject to fluctuations in price and may incur losses when market prices or index prices fall because of changes in linked stock price indexes, decreases in the prices of securities included in the funds, bankruptcy or deterioration of the financial status of the companies that issued the securities included in the funds, and the effects of other market factors. Also, the securities included in the funds are subject to effects from currency exchange rates, and index prices may fall because of fluctuations in exchange rates. Consequently, the investment principal is not guaranteed. Because of the risk characteristics, investment trusts including ETFs are fundamentally different from deposits and savings.
* ETF risks are not limited to the above.
When applying to establish a trust, be sure to read the investment trust documentation (the prospectus) provided by the distributing company and to make your own investment decisions.

ETF Expenses (investors who invest in ETFs through a recognized securities exchange will incur the following expenses)

  • Trading Fee (paid at the time of transaction)
    Trading of the Fund incurs brokerage commission fees set by a first financial instruments business provider (securities firm) that handles the transaction. These commissions are separate from the actual transaction value. (Because the commissions charged by each securities firm differ, it is not possible to specify a maximum amount.)
  • Management fees (fees are charged during the trust period according to the length of the trust period)
    The total management fee is obtained by adding the amount determined in (2) below to the amount determined in (1) below.
    Management fees are paid from the trust assets, and therefore are charged indirectly according to the period that the ETF is held.
    (1) The amount obtained by multiplying the total net assets by a rate determined by the Management Company not to exceed 1.045% annually* (0.95% exclusive of taxes). * The maximum management fee of each ETF is indicated above. For Nikkei 300 Exchange Traded Fund the management fees are calculated based on the Fund‘s principal.
    (2) If the securities belonging to the trust assets have been loaned, an amount no more than 55%* (50% exclusive of taxes) of the loan fees. * The highest loan fee of the ETFs is indicated.
  • Other fees (other fees may be imposed when applicable during the trust period) ETF-related taxes, expenses necessary for trust administrative procedures (including various expenses necessary for safekeeping of overseas assets), interest on advances provided by the trustee, sales consignment fees incurred when securities included in the fund are traded, audit fees, other expenses (including expenses relating to listing of Beneficiary Interests and fees for the use of trademarks to subject indexes), and consumption taxes on these fees are incurred, when applicable, during the trust period. These expenses are paid from the trust assets and are charged indirectly during the period that the ETF is held. Other expenses will vary according to investment circumstances, and consequently, rates and maximum amounts cannot be specified in advance. For further details, please refer to the "Costs and Taxes of the Fund" section in the prospectus. Please note that the prospectus is available in Japanese only. Nomura Asset Management Co., Ltd. does not directly handle requests for ETFs from investors. To invest in an ETF, it is necessary to open an account with a nearby first financial instruments business provider (securities firm) that handles ETFs and make a request to the broker. Nomura Asset Management Co., Ltd. has attempted to provide complete information on this website, but it provides no guarantees concerning its content. Nomura Asset Management Co., Ltd. and financial instrument exchanges bear no liability whatsoever for losses incurred as a result of the information on this website. In addition, use of the information on this website for commercial purposes, and modification, reuse, and redistribution for provision to third parties are strictly prohibited.

Trade name: Nomura Asset Management Co., Ltd.
Director of Kanto Local Finance Bureau (Financial Instruments Firms) No.373
Membership: The Investment Trusts Association, Japan/ Japan Investment Advisers Association/ Type II Financial Instruments Firms Association