NOMURA NOMURA ASSET MANAGEMENT

Notice regarding consolidation of ETFs under the NEXT FUNDS brand, and amendments to management fees of some ETFs

May 29, 2020 marked the 25th anniversary of Nomura Asset Management's pioneering launch of the first ETF in Japan, the Nikkei 300 Index Exchange Traded Fund.
We will take this opportunity to integrate all of our ETF product range within the "NEXT FUNDS" brand identity by renaming some of our funds. We will also make further amendments to the management fees of some ETFs in the range.
Nomura Asset Management is committed to the objective of contributing to asset formation by investors through improvements in convenience, accessibility and active promotion of ETF products.

  1. 1.Integration of ETFs under NEXT FUNDS brand (effective from September 30, 2020)
    Code Name (new) Name (old)
    1306 NEXT FUNDS TOPIX Exchange Traded Fund TOPIX Exchange Traded Fund
    1311 NEXT FUNDS TOPIX Core 30 Exchange Traded Fund TOPIX Core 30 Exchange Traded Fund
    1312 NEXT FUNDS Russell/Nomura Small Cap Core Index Exchange Traded Fund Russell/Nomura Small Cap Core Index Linked Exchange Traded Fund
    1319 NEXT FUNDS Nikkei 300 Index Exchange Traded Fund Nikkei 300 Index Exchange Traded Fund
    1321 NEXT FUNDS Nikkei 225 Exchange Traded Fund Nikkei 225 Exchange Traded Fund
    1328 NEXT FUNDS Gold Price Exchange Traded Fund Gold-Price-Linked Exchange Traded Fund
    1615 NEXT FUNDS TOPIX Banks Exchange Traded Fund TOPIX Banks Exchange Traded Fund
  2. 2.Amendments to management fees (effective from September 30, 2020)
    1. (1)Amendments to terms and conditions of the trust deed

      TOPIX Core 30 Exchange Traded Fund (Code: 1311)

      Prior to the amendment 0.242% annually (0.22%, exclusive of taxes, annually)
      After the amendment The sum of the following two items:
      (i) 0.209% annually (0.19%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees.

      Nikkei 300 Index Exchange Traded Fund (Code:1319)

      Prior to the amendment No greater than 0.572% annually (No greater than 0.52%, exclusive of taxes, annually)
      After the amendment The sum of the following two items:
      (i) No greater than 0.5555% annually (no greater than 0.505%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees

      Nikkei 225 Exchange Traded Fund (Code:1321)

      Prior to the amendment 0.242% annually (0.22%, exclusive of taxes, annually)
      After the amendment The sum of the following two items:
      (i) 0.198% annually (0.18%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees

      TOPIX Banks Exchange Traded Fund (Code:1615)

      Prior to the amendment 0.242% annually (0.22%, exclusive of taxes, annually)
      After the amendment The sum of the following two items:
      (i) 0.209% annually (0.19%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees

      <Abstract>

      • We will amend the terms and conditions of the trust deeds of the above mentioned ETFs, so that the funds can pay the listing fees and index licensing fees that are currently paid by the management company.
      • We will amend the terms and conditions of the trust deeds such that part of the lending revenues related to stock lending is attributed to management fees.
      • At the same time, we will reduce the management fees accordingly as outlined above.
      • We will amend the terms and conditions of the trust deeds, so that the total amount of "listing fees for the beneficiary interests" and "index licensing fees" that are hereafter to be paid directly by the fund do not exceed the amount of the maximum management fee that applied prior to the management fee amendment.
    2. (2)Reduction in management fees

      TOPIX Exchange Traded Fund (Code: 1306)

      1. (i)Reduction in management fees
        Prior to the amendment The sum of the following two items:
        (i) 0.121% annually (0.11%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees
        After the amendment The sum of the following two items:
        (i) no greater than 0.0968% annually (no greater than 0.088%, exclusive of taxes, annually), (ii) part of revenue from stock lending of trust assets to be attributed to management fees
      2. (ii)Management fee scale according to total net assets of the fund
        Total net assets of the fund Part of assets up to
        5 trillion yen
        Part of assets greater than
        5 trillion yen and up to 10 trillion yen
        Part of assets greater than
        10 trillion yen
        Management fees
        (exclusive of taxes)
        0.968% annually
        (0.088% annually)
        0.066% annually
        (0.060% annually)
        0.0429% annually
        (0.039% annually)

      <Abstract>

      • Listing fees for the beneficiary interests (maximum 0.0165% annually [0.015% exclusive of taxes, annually]) that are currently paid by the management company, shall be paid from the fund.
      • At the same time, the management fee shall be reduced accordingly (at least 0.0242% annually [0.022% exclusive of taxes, annually]) and we will introduce staged management fee rates, whereby fees are reduced according to the total net assets of the fund.
      • Subsequently, the daily management fee rate will be reduced in stages according to the total net assets of the fund.

For further details, please refer to the respective prospectuses to be issued on October 1, 2020.

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