Policy on Block Trading

1. Basic Strategy

Nikko AM will place block trades for transactions of a number of investment trust assets managed by Nikko AM if these transactions all have the same terms of sales (including the type and description of securities concerned, whether orders are buy orders or sell orders, kind of transactions, and the price or price range of orders). The firm may also combine different types of invested assets (investment trust assets, assets managed based on discretionary investment contracts, and assets whose transactions are entrusted to us by our overseas asset management partners) for block trading. In some cases, payments or settlements for transactions ordered in block will be made based on average per-unit prices.

2. Securities and Transactions Concerned

Block trading will be limited to cash transactions of securities, such as stocks and Real Estate Investment Trusts (REITs).

3. Allocation of Transaction Results

If transactions ordered in block are partially completed (i.e., if the total amount of transactions completed is below the total amount of transactions ordered), the results of transactions will be allocated to each one of the invested assets concerned in the following way:

For both sell orders and buy orders, the amount of relevant assets ordered for transactions is divided by the total amount of orders, and multiply the quotient by the total amount of transactions completed to obtain the amount to be allocated, within the limit of the amount of relevant assets ordered for transactions.

Fractional amounts below the unit of transaction in the above result are to be truncated. Any difference between the sum of the allocated amounts calculated by the above method and the total amount of transactions completed will be allocated in accordance with company rules.

4. Basic Policy for Best Execution

The purpose of block trading is to ensure equity between invested assets. Therefore, NikkoAM will not work to promote the interests of any particular assets, or act against the interests of customers by giving priority to the interests of our company. Invested assets deemed inappropriate for block trading due to market trends, urgency of transactions, or the characteristics of the assets will be excluded from block trading. In order to maximize cost-performance, we may also divide block trading based on comprehensive examinations of conditions such as market situations and prices.

5. Sensitive Information

In order to implement our policy on block trading, we will prepare business operation manuals and formulate company regulations, and management departments including the Compliance Department will check business operation systems involved in block trading.