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 equities, rights for stock price index futures trading and short-term bonds. The NAV of the Fund may fall and investors may incur a loss for reasons such as a drop in the price of equities, rights for stock price index futures trading and short-term bonds or deterioration in the financial conditions and business performance of an issuer of the equities and short-term bonds. Losses may also be incurred due to exchange rate fluctuation when investing in assets denominated in foreign currencies.

Major risks are as follows:

1.Price Fluctuation Risk

• Stock prices fluctuate as they are affected by information on the company's growth and profitability as well as any change 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 movements or liquidity.
• The prices of rights relating to stock index futures will fluctuate due to fluctuations in the stock prices of companies used to calculate the stock price index, and the constituent stock markets of the stock price index. In addition, the prices of rights relating to stock index trading can fluctuate due to fluctuations in other domestic and overseas stock price indices. There is a possibility of an unexpected change in the prices of rights relating to stock index futures trading in the fund if there is an unexpected fluctuation in the prices of stocks related to the stock price index and the constituent stock markets of the stock price index, which creates risk of a significant losses. In general, stocks of emerging countries and rights related to stock index futures trading tend to exhibit higher price volatility compared with those of developed countries and rights related to stock index futures trading. This can also have a significant impact on the Fund's NAV.
• 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.

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.
• In general, stocks of emerging countries and rights related to stock index futures trading may exhibit higher liquidity risk compared with those of developed countries and rights related to stock index futures trading due to smaller market scale and trading amount.

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 decrease (possibly to zero) due to fears of default or corporate bankruptcy, which can contribute to a decline in the Fund's NAV.
• If a default has occurred or is expected to occur, for issuers of public and corporate bonds or short-term financial assets, the prices 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.

4.Currency Fluctuation Risk

• For foreign-currency-denominated assets, in general, if the yen is stronger than the currencies of such assets, the Fund’s NAV will decline.
• In general, currencies of emerging countries may exhibit higher volatility than those of developed countries.

5.Country Risk

• There is the risk of significant losses in the Fund due to market trends or the flow of funds, including state of emergencies in invested countries (such as financial crises, government default due to financial reasons, significant policy changes or introductions of new regulations including asset freezes, natural disasters, coups or significant political changes, or war). In such cases, it is possible that the fund cannot be managed in accordance with the investment policy.
• 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.Securities Lending Risk

• Lending of securities is accompanied by counterparty risks, which are the risks of default or cancellation of lending agreements as a result of bankruptcy, etc. of the counterparties. As a result, there is a risk that the Fund will incur 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.

＜Risk of Discrepancies in yen-converted MSCI-EMERGING Market Index and NAV＞

This Fund seeks to ensure that its NAV has the same volatility as the yen-converted MSCI EMERGING Market 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;
• The potential investment on selected issues other than MSCI EMERGING Market Index, when portfolio adjustments are made due to changes in selected issues on the MSCI EMERGING Market Index or capital transfers, potential market impact from the trading, etc., of individual issues or expenses from trust fees, brokerage commission, audit costs, etc.
• The management fee from lending securities or dividends of incorporated issues.
• When derivative transactions such as futures are conducted, discrepancies in price movements between such transaction and part or all of the constituent issues of the MSCI EMERGING Market Index.

Discrepancies between the market prices at which equities 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 treated at a market value below or above its NAV.

* The prices of securities targeted for investment of this Fund will fluctuate due to the aforementioned risks. Therefore, please note that this Fund itself has these risks as well.
* The factors that contributes to fluctuations in the NAV are not limited to those listed above.

＜Other points to note＞

• This sales promotional material produced by Nikko AM is primarily intended to provide information on the Listed Index Fund International Emerging Countries Equity (MSCI EMERGING). It has also been prepared to deepen the understanding of investors about this Fund.
• Unlike deposits and insurance contracts, this Fund is not protected by the Deposit Insurance Corporation of Japan and the Life and Non-life Insurance Policyholder Protection Corporations of Japan. If this Fund is purchased through registered financial institutions such as banks, it will not be covered by the Japan Investor Protection Fund either.
• All earnings and losses that occur to trust assets belong to the beneficiaries. Applicants are required to have a full understanding of the investment objectives of the Fund and risk factors involved therein.
• When applying for this Fund, investors should fully read documents handed over prior to the conclusion of contracts.