NOMURA NOMURA ASSET MANAGEMENT

Notice regarding possible termination of trust and amendments in basic terms and conditions due to reduction in number of units of beneficial interest in "NEXT FUNDS JPX-Nikkei 400 Leveraged Index Exchange Traded Fund (1470)"

With respect to the "NEXT FUNDS JPX-Nikkei 400 Leveraged Index Exchange Traded Fund" (hereinafter referred to as this ETF, Code: 1470) launched and managed by Nomura Asset Management Co., Ltd., we would like to announce that this ETF may fall under the conditions of redemption due to a decrease in the number of units of beneficial interest, stipulated in the basic terms and conditions, and that the trust may be terminated or delisted.

Under the terms and conditions of the trust deed of the ETF, if the number of units of beneficial interest falls below 20,000 units for 20 consecutive business days, the trust agreement will be terminated and the trust will be closed. As of April 27, 2021, the number of units of beneficial interest was 9,862 units, which means that the number of units of beneficial interest fell below 20,000 units. Today we made the decision to amend the basic terms and conditions such that the trust termination date (redemption date) will be set on June 30, 2021, if the number of units of beneficial interest continuously remains below 20,000 units from today until May 28, 2021. The amendment is scheduled to become effective on June 8, 2021. The payment of redemption proceeds will commence within 40 days from June 30, 2021.

This ETF is expected to be designated as a "security under supervision" (confirmation) by the Tokyo Stock Exchange. In addition, if the termination of the trust is decided, it is expected to be designated as a "security to be delisted". In this case, this ETF is expected to be delisted on June 29, 2021 with the final trading date on June 28, 2021.

Unless the termination of the trust is decided, the management of the ETF will continue as usual, in order to track the "JPX-Nikkei 400 Leveraged Index". If the termination of the trust is decided and it is no longer possible to manage the ETF to track the index, a separate announcement will be made. Moreover, the trust will not be terminated if the number of beneficial interests exceeds 20,000 units by May 28, 2021.

[Schedule]
If the number of units of beneficial interest remains below 20,000 units for 20 consecutive business days from today, the schedule will be as follows.
Tuesday, April 27, 2021: Designated as security under supervision (confirmation) on TSE
Friday, May 28, 2021: Designated as security to be delisted on TSE
Tuesday, June 8, 2021: Effective date of amendment to basic terms and conditions
Monday, June 28, 2021: Final date of trading on TSE
Tuesday, June 29, 2021: Date of delisting from TSE
Wednesday, June 30, 2021: Trust termination date
By Friday, August 6, 2021 payment of redemption proceeds will begin.

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