NOMURA NOMURA ASSET MANAGEMENT

Notice regarding benchmark index for NEXT FUNDS NOMURA Crude Oil Long Index Linked Exchange Traded Fund (Code:1699)

Nomura Securities Co., Ltd., the calculation company of the "NOMURA Crude Oil Long Index" which is the benchmark index for aforementioned ETF, has announced a change in the calculation rules for the index, and therefore Nomura Asset Management would like to inform you of the details of the change and the measures to be taken by the ETF in response thereto.

<Changes in the benchmark index>

The following changes are planned with respect to the contract months subject to the calculation of "NOMURA Crude Oil Long Index" which is the benchmark index of the ETF.

After Change Before Change
WTI Crude Oil Futures contracts for the first or second to the next 3 contract months (Second, third and fourth contract months or third, fourth and fifth contract months) WTI Crude Oil Futures contract for the first or second contract month

*The futures contracts have maturities (delivery month) with the first and second... contract months ending closest to maturity.

Calculation rules will be changed effective from November 30, 2020.

For details please refer to the following notice announced by Nomura Securities Global Research Division, Financial Engineering & Technology Research Center.

<Response to the target ETF>

The revised calculation rules aim to diversify the target delivery month and are considered to be in line with the purpose of the index to track the price movements of crude oil prices by investing in crude oil futures. In addition, we determined that this change will enable us to provide asset management linked to the relevant benchmark index on an ongoing basis while preserving assets, so we will continue to manage assets using "NOMURA Crude Oil Long Index" as the benchmark index.

Expiration months with short maturities tend to be more affected by short-term supply and demand. As a result of the change in the calculation rules, the target delivery month for the index will be changed from a single delivery month to three delivery months with relatively longer maturities, so the impact on price movements of the index due to short-term fluctuations in supply and demand is expected to be smaller than before the change.

In addition, from the viewpoint of preserving trust assets, the ETF has been responding to the early transfer to the forward delivery months and the diversification of the delivery months. As a result, it is expected that the ETF will be more closely linked to the benchmark index.

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