The Fund seeks to achieve NAV that closely correlates with the movement of Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index by investing in component stocks of the index and by principally maintaining a portfolio constructed according to the calculation method of the index.
Net Asset Value and Performance
|NAV (per 1 share):||¥ (As of: )||Net Assets:||
|Fund Name||Listed Index Fund MSCI Japan Equity High Dividend Low Volatility (Beta Hedged)
Open-ended type/Domestic/Equity/ETF/Index fund
|Listed Exchange||Tokyo Stock Exchange|
|Targeted Investments||This Fund invests in component stocks of the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index, principally maintaining a portfolio constructed according to the calculation method of the index.|
|Date Listed||13 March 2017|
|Exchange Trading Unit||10 units|
|Trust period||Unlimited (launch date: 09 March 2017)|
|Computation Period||From 9 January to 8 April, 9 April to 8 July, 9 July to 8 October of each year, and from 9 October to 8 January of the following year|
|Closing Date||8th of January, April, July, and October every year|
|Dividends||As a general rule, the full amount of dividends and other income arising from the trust assets is distributed after deduction of expenses.
*There is no guarantee on the payment or the amount of dividend.
Overview of Fees & Expenses
|Trading Fee||Stipulated by the broker. Please contact your broker for details.|
|Amount to be Retained in Trust Assets||None.|
No more than 0.486%(0.45% excluding taxes) per annum of the daily total NAV of the fund.
*The investment management fee is paid out of the trust assets at the end of each calculation period or at the time of termination of the Trust.
Distribution of Investment Management Expenses(annual rate)
When above is 0.45%, as of the date of filing of the securities registration statement:
*Figures are excluding tax. Consumption tax will be added.
|Other Expenses and Fees||
Not more than 0.1% per annum of total daily net assets during trust period of the fund.
1. Expenses for the preparation and distribution of prospectuses, 2. Cost for accounting and its incidental operations, 3. Cost for preparation of financial summary statement (including outsourcing fee in case of outsourcing the (1) - (3) operations), 4. Auditing fee, 5. Fees related to the listing of the fund, 6. Royalties for the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index, and others are paid out of the trust assets at the times specified by the Management Company.
*Auditing fee is an expense paid to audit firm for auditing of the Fund.
|Other Expenses and Fees (Brokerage commissions and other fees)||
Brokerage commissions on securities in the portfolio, interest on borrowings, interest on advances, lending fee (in case security lending is conducted, the amount obtained by multiplying a lending fee on securities lent by a figure which is profit for Trust Assets, not exceeding 0.54 (0.5 excluding taxes) (0.5 excluding taxes as of the date of the filing of the securities registration statement), and other fees are paid out of the trust assets each time they are incurred.
*The figures for items such as the rate and maximum amount cannot be provided in advance as they fluctuate in line with investment performance and other factors.
The total amount of expenses of the Fund to be borne by investors varies according to holding length and investment status, and thus cannot be shown.
Major Investment Restrictions
The Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index is an equity index developed by MSCI, Inc. The index performs beta hedging against the performance (calculated with an equity weighting of 85%) of the MSCI Japan IMI Custom Liquidity and Yield Low Volatility Index *1 (hereinafter the “Source Index”) by combining beta numbers with the inverse of the performance (calculated with an equity weighting of 85%) of the MSCI Japan IMI index *2, and is an indexation of the difference between the return of the Source Index and the return of the MSCI Japan IMI index. Taking actual investment management possibilities into consideration, the index is calculated with an equity weighting of 85% and a cash weighting of 15%.
The list of component stocks is reviewed every February, May, August, and November.
*1 The MSCI Japan IMI Custom Liquidity and Yield Low Volatility Index is an indexation of performance of component stocks of the MSCI Japan IMI Index that are optimized based on the investment ratio to minimize price fluctuation after analyzing historical prices by mathematical model, and its securities universe has relatively high liquidity and high dividend securities among the component stocks of the MSCI Japan IMI index (excluding finance-related stocks and listed REITs.)
*2 The MSCI Japan IMI index is designed to measure performance of entire Japanese equity market and covers almost all market value after floating shares adjustment.
Movements of the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index have the following characteristics.
Discrepancy with the Source Index
Compared to the Source Index, the index is not easily impacted by the overall stock market, and its daily fluctuations tend to be small. Therefore, its gains and losses tend to be small in comparison with the Source Index.
Points to Note on Investment StyleThe index can be expected to lighten losses caused by overall stock market falls, but it may also have limited opportunities for gains when the overall stock market rises. Therefore, investors aiming to track the movement of the overall stock market and those aiming for short-term gains should take note that the index is unlikely to have these desired effects.
Japan Exchange Group (JPX)
- Listed ETF Prices
To see the Listed ETF Prices, please follow this link and click "Display of stock price".
Japan Exchange Group publishes summaries and lists of the ETFs, as well as other valuable information on their website.
This Fund is not sponsored, endorsed, sold, or promoted by MSCI Inc and its affiliated companies, information provider, and other third parties (hereinafter refers to "MSCI"), who were involved or related in the editing, calculation, or creation of the MSCI index. MSCI index is an exclusive property of MSCI. The name of MSCI and MSCI Index is a service mark of MSCI and its affiliated companies and Nikko Asset Management Co., Ltd. is allowed to use this for specific a purpose. Any companies related to MSCI make no expression or warranty, expressed or implied, as specified to the Fund’s owners or issuers, or any member of the public or organizations regarding the advisability of investing in securities generally or in the Fund particularly or in the ability of MSCI Index to track the performances of certain financial markets. MSCI and its related companies are licensers of MSCI Index and determine, create, and calculate the MSCI index regardless of specific trademarks, service marks or names, the Fund’s issuer or owners, and any member of the public or organizations. Any companies related to MSCI have no obligation to consider the requests of the Fund’s issuers or owners, or any member of the public or organizations when determining, editing and calculating MSCI Index. Any companies related to MSCI are not responsible for or been involved in the determination of the timing of, price at, or amount of the Fund to be issued, or in determination or calculation of the equation by which the Fund to be converted into cash, or the Fund’s conversion price. Any companies related to MSCI assume no obligation to the Fund’s issuer or owner, any member of the public or organizations regarding, nor do they take any responsibility for management, marketing or trading of the Fund whatsoever.
MSCI obtains information required for calculating and using in the MSCI Index from sources it thinks are reliable, however, any companies related to MSCI do not make any guarantee of the originality, accuracy or completeness of MSCI Index or the data of the Index. Any companies related to MSCI make no guarantee, expressed or implied, of the results to be obtained by the Fund’s issuer or owner, or any member of the public or organizations from the use of this Index or data included therein. Any companies related to MSCI take no responsibility for any error, omission in the data included or the discontinuation of MSCI Index. Furthermore, any companies related to MSCI expressively disclaim all warranties or conditions of merchantability or suitability for a particular purpose or use of this Index or the data contained therein, and make no guarantee, express or implied, on merchantability or suitability of this Index or the data contained therein. Without limiting any of the foregoing, any companies related to MSCI are not responsible for any direct, indirect, special, punitive, or consequential damages, and all other damages (including lost profits) arising from the use of the data contained therein, even if notified of the possibility of such damages in advance.
The Fund’s purchasers, distributors, owners or any member of the public or organizations cannot use or mention MSCI's name, trademark or service mark for the purpose of sponsoring, endorsing, selling, or promoting the Fund without checking whether it is necessary to obtain MSCI’s prior consent. Any member of the public or organizations cannot mention their relationship with MSCI without obtaining MSCI's written approval in advance.
The Index is a combination of the MSCI Japan IMI Custom Liquidity and Yield Low Volatility Index and the MSCI Japan IMI index based on factors provided by Nikko Asset Management Co., Ltd.
A unit stock is a unit in a stock basket that an investor applying for an acquisition through addition contributes to. A unit stock is also a unit in a stock basket that an investor who applies for an exchange receives in trade for a beneficial interest.
This Fund can be applied for as a direct addition and exchange at Authorised Participants in addition to the Tokyo Stock Exchange. In this case, "unit stock" is referred to as a unit. When applying as a direct addition and exchange, please keep in mind that we cannot accept your application on the following dates:
- SMBC Nikko Securities Inc.
- ABN AMRO Clearing Tokyo Co., Ltd.
- Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
- Mizuho Securities Co., Ltd.
- Nomura Securities Co., Ltd.
Daily Creation and redemption are based on ETF's NAV calculated in early evening. Confirm non-tradable days by referring to trading calendar on our official homepage. Basket for creation is continually-updated on our official homepage.
Basically sell/buy underlying asset at last price of T day's market.
The flow chart below is showing the creation/redemption process for Nikko AM ETFs. Please note that transactions cannot be processed for days on which applications are not accepted.
Creation Flow for Cash Creation/Redemption Type ETFs
Redemption flow for Cash Creation/Redemption Type ETFs
Investors are not guaranteed the investment principal that they commit. Investors may incur a loss and the value of their investment principal may fall below par as the result of a decline in NAV. All profits and losses arising from investments in the Fund belong to the investors (beneficiaries). This fund is different from saving deposit.
The Fund invests primarily in stocks and stock index futures contract rights. The NAV of the Fund may fall and investors may suffer a loss due to a decline in stock and stock index futures contract rights prices or deterioration in the financial conditions and business performance of an equity issuer. In the case of investments in foreign currency-denominated assets, losses may be suffered fur to exchange rate fluctuations.
Major risks are as follows:
1. Price Fluctuation Risk
Stock prices fluctuate as they are affected by information on the company’s growth rate and profitability as well as changes in such information. They also fluctuate as they are affected by economic and political conditions in Japan and abroad. There is a risk that the Fund will suffer material losses if unexpected changes occur in stock price or liquidity.
Stock index futures contract rights prices fluctuate as they are affected by price movements of the stocks of the companies that form the basis for calculating the stock price index, as well as the stock markets that comprise the stock price index. Stock prices may also fluctuate in response to the movements of other stock price indexes in or outside of Japan. There is a possibility of unexpected changes in the prices of rights relating to stock index futures trading and as a result, the risk that the Fund will incur significant losses, if there is an unexpected fluctuation in the prices of stocks related to the stock price index or the constituent stock markets of the stock price index.
2. Liquidity Risk
The Fund may incur unexpected losses when the size of the market or trading volumes is small. The purchase and sale prices of securities are influenced by trading volume, resulting in the risks that they cannot be traded at prices expected to be realized in light of the prevailing market trend, sold at the estimated prices, or that the trading volume is limited regardless of the level of prices.
3. Credit Risk
There is a risk that the Fund will incur material losses in the event of a serious crisis that directly or indirectly affects the business of a corporation in which the Fund invests. The prices of stocks of issuers may substantially decline (possibly to zero) due to fears of default or corporate bankruptcy, which can contribute to decline in the Fund NAV.
4. Foreign Exchange Rate Fluctuation Risk
In general, the Fund’s NAV may fall if the exchange rate of the currency in which foreign currency-denominated assets are denominated falls against the yen.
5. Derivative Risk
As financial derivatives-based finance contracts may be used, the value of derivatives will fluctuate depending on the value of underlying assets. The price of derivatives will fluctuate more than the underlying assets depending on the type of derivative. There is also the risk of suffering losses from being unable to execute transactions as originally contracted due to the bankruptcy of transacting parties, the risk of being unable to perform a reverse trade once a transaction has been settled, or the risk of only being able to perform a reverse trade under markedly unfavorable conditions compared to the theoretical price.
6. Beta Hedging Risk
As the Fund aims to constrain the impact of volatility in Japan’s overall stock market by investing in equities while taking short positions in stock index futures contracts (TOPIX futures contracts, etc.) (beta hedging), rises in Japan’s overall stock market may not always generate gains for the Fund.
The Fund’s NAV may fall if gains from equity investments are smaller than losses from stock index futures contracts, or if losses from equity investments are larger than gains from stock index futures contracts. The Fund’s NAV may see a particularly large drop if losses from both equity investments and stock index futures contracts are seen at the same time.
7. Security-lending Risk
Lending of securities involves counterparty risks, which are the risks of contractual default or cancellation following bankruptcy, etc., by the counterparty. As a result, the Fund may suffer unexpected losses. Following the default or cancellation of a lending agreement, when liquidation procedures are implemented by using the collateral that is set aside in the lending agreement, the procurement cost of buying back the securities can surpass the collateral value, due to price fluctuations in the market. In such cases, the Fund is required to pay the difference, which may cause the Fund to incur losses.
Risks of Discrepancy between the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index and the NAV
The Fund seeks to match the NAV volatility with that of the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index, but it cannot guarantee that movements will be consistent with the Index for the following reasons:
- The Fund may be subjected to a market impact when buying or selling individual stocks as it adjusts its portfolio in response to changes in the stocks that comprise the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index and capital changes among corporations. In addition, the Fund will incur various expenses, including trust fees, brokerage commissions, and audit fees.
- Dividends may be paid by stocks in the portfolio and fees may be earned for securities lent.
- The beta hedging method of the Fund (using stock price futures indexes (TOPIX, etc.)) may differ from the beta hedge calculation method used in the Long Short Strategy Index on MSCI Japan IMI Custom 85% + CASH (JPY) 15% Index.
Discrepancy between the market prices at stock exchanges and the NAV
The Fund is listed on the Tokyo Stock Exchange and the units are traded on that exchange. The market price of the units is affected primarily by the size of demand for the Fund, its performance, and how attractive it is to investors in comparison with their other investments. It is not possible to predict whether the units will sell in the market above or below the NAV.
* Factors that contribute to NAV fluctuations are not limited to those listed above.
- The provision stipulated in Article 37-6 of the Financial Instruments and Exchange Act (“cooling-off period”) is not applicable to Fund transactions.
- This Fund differs from deposits or insurance policies in that it is not protected by the Deposit Insurance Corporation of Japan or the Policyholders Protection Corporation of Japan. Furthermore, units purchased from registered financial institutions, such as banks, are exempted from compensation by the Japan Investor Protection Fund.
Risk Management System
- The departments in charge of risk management and compliance perform the evaluation and analysis of risks and performance, risk management, and monitoring of the status of compliance with laws, and are independent from fund management departments.
- To maintain an appropriate management system, the departments in charge of risk management and compliance will report and make proposals to the committees associated with risk management and compliance, and instruct fund management departments to take corrective actions as necessary.
* The system described above is as of the end of November 2016, and may be subject to change in the future.