This Fund seeks to achieve net asset volatility per unit of trust assets which closely correlates with that of the yen-converted Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index by investing mainly in all or portion of separately stipulated investment trust securities.

Key information
Name: Listed Index Fund Emerging Bond

ProspectusProspectus

Earnings ReportEarnings Report

Code: 1566

Net Asset Value and Performance

NAV (per 1 share): ¥   (As of: ) Net Assets:
million
Day change:
¥
Issued:
shares

Performance Chart

Net Asset Value (per Shares) (including dividend payment) (¥)
Bloomberg Barclays EM Local Currency Government - 10% Country Capped Index

  • NAV value is listed after deducting trust fees.
  • NAV progression is listed assuming that dividends (before taxes) are reinvested.
  • AUM per share and the index are indexed at 100 starting from 30th January 2012 (inception day) and 30th March 2012 (listing date).
  • Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”) or Bloomberg’s licensors own all proprietary rights in the BLOOMBERG BARCLAYS INDICES.
  • The performance, data, etc., noted above are based on past information and neither guarantee nor promise future performance.

Fund of Funds Structure

This Fund of Funds invests in securities held for investment trust.

  • Emerging Markets Local Currency Government Index Fund (for Institutional Investors)
    This fund seeks to achieve results that correlate to the movements of the yen-converted Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index by investing mainly in bonds denominated in the local currencies of emerging countries.
  • Money Account Mother Fund
    This Fund seeks to achieve stable returns through stable management by investing in public and corporate bonds.

Listed Index Fund Emerging Bond

Fund Name Listed Index Fund Emerging Bond
Open-ended type/Foreign/Bonds/ETF/Index fund
Listed Exchange Tokyo Stock Exchange
Issue Code 1566
Targeted Investments Investment trust securities that seek to closely match the movement of the yen-converted Bloomberg Barclays EM Local Currency Government - 10% Country Capped Index.
Date Listed 30 March 2012 (launched on 30 January 2012)
Exchange Trading Unit 1 unit
Taxation when selling out the fund Conforms to taxation related to the sale of stocks.
Trust period Unlimited
Computation Period Every year, 11 Jan - 10 Mar, 11 Mar - 10 May, 11 May - 10 Jul, 11 Jul - 10 Sep, 11 Sep - 10 Nov, and 11 Nov - 11 Jan of following year.
Closing Date Every year, the 10th day of odd-numbered month.
Dividends All revenue from dividends arising from the trust assets will be, in principle, paid as dividends on the last day of the fiscal year after deducting 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 the broker for details.
Amount to be Retained in Trust Assets 0.3% of NAV at the time of exchange.
Trust Fee

The real trust fee is calculated by multiplying the total net asset value approximately 0.486% per annum (0.45% before tax)

The breakdown of the trust fee rate is as follows: the fund's trust fee rate is no higher than 0.378% per annum (0.35% before tax) and the trust fee rate for incorporating investment trust securities targeted for investment is approximately 0.108% per annum (0.1% before tax).

*Subject to change based on changes in the constituent issues or weighting of the target investment trust securities.

Other Fees and Costs

An amount no more than the total amount for the trust period reached by multiplying an annual rate of 0.1% on the fund's daily net asset value.

The following expenses are paid out of the trust assets at the times specified by the Management Company: 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 the cost to outsource the work involved in 1. - 3.); 4. Audit cost; 5. Expenses for listing the Fund; and 6. Royalties for Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index, etc.

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

  • This Fund will not invest directly in any securities other than commercial paper and designated money trusts, such as investment trust securities and short-term corporate bonds.
  • There are no restrictions on the ratio of investment in foreign currency-denominated assets.

Trustee Companies

  • The Sumitomo Mitsui Trust Bank,Limited
    (Japan Trustee Services Bank, Ltd.)

Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index is the total return of local currency-denominated emerging market bonds weighted by the market capitalization. The index limits concentrated investments in just one country and expresses fluctuations in emerging country bonds and currencies.

What is Bloomberg Barclays EM Local Currency Government

Further Information

Japan Exchange Group (JPX)

  • Listed ETF Prices

    To see the Listed ETF Prices, please follow this link and click "Display of stock price".

Bloomberg Barclays English Website

  • Index Constituents
  • Index Calculation Summary

    Click on "Guides & Factsheets" in the menu on the left of the page and then locate "Emerging Markets Local Currency Government - 10% Country Capped Index Factsheet" in the middle of the page.

Japan Exchange Group publishes summaries and lists of the ETFs, as well as other valuable information on their website.

Copyrights to "Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index"

“BLOOMBERG is a trademark and service mark of Bloomberg Finance L.P. BARCLAYS is a trademark and service mark of Barclays Bank Plc, used under license. Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”) or Bloomberg’s licensors own all proprietary rights in the BLOOMBERG BARCLAYS INDICES. Neither Bloomberg nor Barclays Bank Plc or Barclays Capital Inc. or their affiliates (collectively "Barclays") guarantee the timeliness, accuracy or completeness of any data or information relating to BLOOMBERG BARCLAYS INDICES or make any warranty, express or implied, as to the BLOOMBERG BARCLAYS INDICES or any data or values relating thereto or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. It is not possible to invest directly in an index. Back-tested performance is not actual performance. Past performance is not an indication of future results. To the maximum extent allowed by law, Bloomberg and its licensors, and their respective employees, contractors, agents, suppliers and vendors shall have no liability or responsibility whatsoever for any injury or damages - whether direct, indirect, consequential, incidental, punitive or otherwise - arising in connection with BLOOMBERG BARCLAYS INDICES or any data or values relating thereto - whether arising from their negligence or otherwise. This document constitutes the provision of factual information, rather than financial product advice. Nothing in the BLOOMBERG BARCLAYS INDICES shall constitute or be construed as an offering of financial instruments or as investment advice or investment recommendations (i.e., recommendations as to whether or not to “buy,” “sell,” “hold” or enter into any other transaction involving a specific interest) by Bloomberg or its affiliates or licensors or a recommendation as to an investment or other strategy. Data and other information available via the BLOOMBERG BARCLAYS INDICES should not be considered as information sufficient upon which to base an investment decision. All information provided by the BLOOMBERG BARCLAYS INDICES is impersonal and not tailored to the needs of any specific person, entity or group of persons. Bloomberg and its affiliates express no opinion on the future or expected value of any security or other interest and do not explicitly or implicitly recommend or suggest an investment strategy of any kind. In addition, Barclays is not the issuer or producer of the BLOOMBERG BARCLAYS INDICES and has no responsibilities, obligations or duties to investors in these indices. While Bloomberg may for itself execute transactions with Barclays in or relating to the BLOOMBERG BARCLAYS INDICES, investors in the BLOOMBERG BARCLAYS INDICES do not enter into any relationship with Barclays and Barclays does not sponsor, endorse, sell or promote, and Barclays makes no representation regarding the advisability or use of, the BLOOMBERG BARCLAYS INDICES or any data included therein. Customers should consider obtaining independent advice before making any financial decisions. ©2016 Bloomberg Finance L.P. All rights reserved.”

This Fund can be applied for as a cash creation and a cash redemption at Authorised Participants in addition to the Tokyo Stock Exchange. When applying as a direct addition and exchange, please keep in mind that we cannot accept your application on the following dates:

Authorized Participants

  • SMBC Nikko Securities Inc.
  • Citigroup Global Markets Japan Inc.
  • ABN AMRO Clearing Tokyo Co., Ltd.
  • Merrill Lynch Japan 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 at last price of T day's market while FX rate is TTM of one business day after the application (10am on T+1)

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

Cash Creation/Redemption Type ETFs

Redemption 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 market price or 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 bonds. The NAV of the Fund may fall and you may suffer a loss for reasons such as a drop in the price of bonds or deterioration in financial conditions and business performance of an issuer of stocks. Investors may also incur losses due to exchange rate fluctuations when investing in assets denominated in foreign currencies.

Major risks are as follows:

1. Price Fluctuation Risk
Corporate and government bonds generally have a price fluctuation risk arising from changes in interest rates. Generally, their prices go down when interest rates rise, causing the NAV of the funds to fall. The degree of price fluctuation varies depending on the remaining time to maturity and the terms of issue in question.

The price of bonds in emerging countries to be targeted tends to be more volatile as compared with bonds in advanced countries. Consequently, price fluctuation may have significant impact on the NAV.

2. Liquidity Risk
Where the market size or trading volume is small, buying and selling prices for securities may be largely affected. This results in the risk that securities cannot be traded at the expected prices, sold at the appraised prices, or that trading volume is limited regardless of prices. This creates the risk of unexpected losses.

Bonds of emerging countries tend to be more susceptible to liquidity risk due to their smaller market size and trading volume when compared to those of advanced countries.

3. Credit Risk
If a default has occurred or is expected to occur, for issuers of public and corporate bonds or short-term financial assets, the price of such public and corporate bonds or short-term financial assets decline (the value could even fall to zero). This results in a decline of the Fund's NAV. In addition, if default in fact occurs, there is a high possibility of being unable to collect investment funds.

While the return on emerging countries' bonds may be higher than those of advanced countries, they also have more price volatility and higher risk of default.

4. Currency Fluctuation Risk
For foreign-currency-denominated assets, in general, if the yen is stronger than the currencies of such assets, the Fund?fs NAV will decline.

In general, currencies of emerging countries may exhibit higher volatility than those of developed countries.

5. Country Risk
There is a risk that the Fund could incur material losses as a result of unexpected market fluctuation or flow of funds, including the occurrence of any state of emergencies in a target country (such as a financial crisis, government default due to financial reasons, significant policy change, introduction of new regulations including asset freezes, natural disasters, coups, significant change of regime or war). In such cases, the fund may not be managed as planned.

Emerging countries in general tend to be insufficient or slow in information disclosure or in the dispatch of accurate information, when compared to advanced countries.

6. Security-lending Risk
Lending securities is accompanied by counterparty risks, which are the risks of default or cancellation of lending agreements as a result of bankruptcy, etc. by the counterparties. As a result, there is a risk that the Fund will suffer unanticipated 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 a case, the fund would need to make up for the price difference, and therefore incur a loss.

Main Factors Contributing to the Discrepancies between Yen-converted Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index and NAV

This Fund seeks to ensure that its NAV has the same volatility as the yen-converted Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index; however, we cannot always guarantee that the Fund will have the same volatility as the Index due to the following factors attributable to this Fund and to the investment trust securities invested in by this Fund:

  • Lag in the timing of fund inflows and to the purchase of investment trust securities.
  • Where the portfolio is adjusted through investment in issues other than the constituent issues of the Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index or through changes in the constituent issues or weighting of Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index, the trading of individual issues may be affected by market impact or the Fund may bear costs such as management fees, brokerage fees and auditing fees.
  • Securities lending fees from lending securities; and
  • Where derivative transactions such as futures are conducted, discrepancies in price movements between such transactions and part or all of the constituent issues of the Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index.

Discrepancies between the market prices at which stocks are traded on the exchange and the NAV
This Fund is listed on and will be publicly traded on the Tokyo Stock Exchange, however, the market price of the units will depend mainly on the demand for the Fund, its investment performance, and how attractive it is to investors in comparison to alternative investments, etc. We cannot predict whether this fund will be traded as a market value below or above its NAV.

  • The prices of securities targeted for investment of this Fund will fluctuate under the influence of the aforementioned risks. Therefore, please note that this Fund itself has these risks as well.
  • The factors that contribute to fluctuations in the NAV are not limited to those listed above.
  • Securities lending fees from lending securities; and

Additional Considerations

  • These distribution materials were prepared for the purpose of providing information on the Listed Index Fund Emerging Bond offered by Nikko Asset Management and increasing investors' understanding of this Fund.
  • The provisions stipulated in Article 37-6 of the Financial Instruments and Exchange Act ("cooling-off period") are 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.
  • When applying to invest in the Fund, please make the decision to invest carefully after taking the time to read the delivered pre-agreement document and other relevant materials in detail.