This Fund seeks to achieve net asset worth per unit that closely correlates with the movement of the Nikkei ESG-REIT Index by mainly investing in Real Estate Investment Trust (REIT) securities of the components of the Nikkei ESG-REIT Index.

Key information
Name: Listed Index Fund Nikkei ESG-REIT

ProspectusProspectus

Code: 2566

Net Asset Value and Performance

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Fund Outline

Fund Name Listed Index Fund Nikkei ESG-REIT
Open-end Investment Trust/Domestic/REITs/ETF/Index type
Listed Exchange Tokyo Stock Exchange
Issue Code 2566
Targeted Investments This fund aims to achieve investment returns that link with the movement of the Nikkei ESG-REIT Index.
Date Listed September 7, 2020
Exchange Trading Unit 10 units
Trust period Unlimited (launch date: September 3, 2020)
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 day of January, April, July and October each 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.

Fund Expenses

■Expenses to be borne directly by investors

Subscription Fee Independently set by Distributors
*Please contact your Distributor for further information.
*Subscription Fee is compensation for explanation and information providing about the Fund or investment environment, and is also including expense of clerical processing of the subscription.
Exchange (Buyback) Fee Independently set by Distributors
*Please contact your Distributor for further information.
*Exchange Fee is compensation for clerical processing of the exchange.
Amount to be Retained in Trust Assets None.

■Costs paid indirectly by the customer for the trust assets (paid from the fund)

Investment Management Expenses
(Trust fee)

No more than 0.165%(0.15% excluding taxes) per annum of the daily total NAV of the fund.

*Additionally, there are costs related to the management of the REITs in which the fund invests, and as the target REIT issues are not fixed, the rate or maximum amount cannot be shown.

The investment management fee is daily recorded and 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 0.15%, as of the date of filing of the securities registration statement:

Investment Management Expenses(Trust fee)
=NAV of investment period X Trust fee rate
Total Management Company Trustee
0.15% 0.11% 0.04%
Management Company Compensation for investment management
Trustee Compensation for administration of assets under management and execution of orders from Management Company

*Figures are excluding tax. Consumption tax will be added.

Other Expenses and Fees
Expenses(Expenses for preparation of prospectuses and other expenses)

No more than 0.1% per annum of the daily total NAV of the Fund

1. Expenses for preparation and distribution of prospectuses etc., 2. Expenses for accounting and operations incidental to the same, 3. Expenses for preparation of financial statements (including fees for outsourcing operations described in 1.-3.), 4. Auditing fee, 5. Expenses for listing of the Fund, as well as 6. Royalties for the Nikkei ESG-REIT Index 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 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 0.55 (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. These fees are incorporated in the TER stated.

*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.

Investment Restrictions

  • The investment ratio in REIT securities (except listed REIT securities) is no more than 5%.
  • The Fund does not invest in assets denominated in foreign currencies.

Trustee Companies

  • Sumitomo Mitsui Trust Bank, Limited

The Nikkei ESG-REIT Index is an aggregate market value×ESG coefficient weighted type index, which applied ESG coefficient granted in accordance with ESG rating by GRESB, an international ESG rating standard, to Real Estate Investment Trusts (J-REIT) listed on the Tokyo Stock Exchange. The Index is calculated with a starting value 1,000 point, the base date November 30, 2016.

The component issues are adjusted every November, in principle.

Further Information

Japan Exchange Group (JPX)

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

Nikkei Inc.

Copyright, etc. of the Nikkei ESG-REIT Index

The Nikkei ESG-REIT Index is a copyrighted material calculated in a methodology independently developed and created by Nikkei Inc. and Nikkei Inc. is the sole exclusive owner of the copyright and other intellectual property rights in the Nikkei ESG-REIT Index itself and the methodology to calculate the Nikkei ESG-REIT Index;
The trademark rights and any other intellectual property and any other rights in the marks to indicate Nikkei and the Nikkei ESG-REIT Index shall be vested in Nikkei Inc.;
The ETF is managed exclusively at the risk of the Licensee and Nikkei Inc. shall assume no obligation or responsibility for its management and transactions of the ETF.
Nikkei Inc. shall not have the obligation to continuously announce the Nikkei ESG-REIT Index and shall not be liable for any error, delay, interruption, suspension or cessation of announcement thereof; and
Nikkei Inc. shall have the right to change the composition of the stocks included in the Nikkei ESG-REIT Index, the calculation methodology of the Nikkei ESG-REIT Index or any other details of the Nikkei ESG-REIT Index and shall have the right to discontinue the publication of the Nikkei ESG-REIT Index.
All intellectual property rights to the GRESB Assessment data belong exclusively to GRESB BV. All rights reserved. GRESB BV has no liability to any person (including a natural person, corporate or unincorporated body) for any losses, damages, costs, expenses or other liabilities suffered as a result of any use of or reliance on any of the information which may be attributed to it.

Daily Fund Data (CSV)

Portfolio data (XLS)

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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:

Authorized Participants

  • ABN AMRO Clearing Tokyo Co., Ltd.
  • BNP Paribas Securities (Japan) Limited
  • Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
  • Nomura Securities Co., Ltd.
  • SMBC Nikko Securities Inc.

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.

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 In-kind Creation/Redemption Type ETFs

Creation Flow for In-kind Creation/Redemption Type ETFs

Essential Considerations

  • Please secure the basket for creation ETF when making application.
  • We recommend you to take measures like borrowing stocks in order to secure the basket for settlement for ETF creation.

Redemption flow for in-kind Creation/Redemption Type ETFs

Redemption flow for in-kind 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 REITs. The NAV of the Fund may fall and investors may suffer a loss due to a decline in REIT prices or deterioration in the financial conditions and business performance of a REIT issuer.

Major risks are as follows:

Price Fluctuation Risk
Income and profits from the sale of real estate and real estate securitized products form the source of earnings for REITs, and REIT prices can fluctuate due to various factors including the circumstances surrounding the real estate, real estate market conditions, trends in long- and short-term interest rates and changes in the macroeconomic environment. Aging and changes in property conditions as well as the loss of or damage to properties from fire or natural disasters can also affect the price. Deterioration in dividends, financial conditions, earnings, and the market environment can cause a decline in the price of the REIT and a loss in the fund.

Liquidity Risk
In a situation where the market or trading volume is small, the price at which a security can be purchased or sold can be greatly influenced by the size of the transaction, giving rise to the risk that a transaction cannot be completed at the price expected from the market conditions, that a security cannot be sold as appraised, or that the transaction volume is limited regardless of the price level. This could lead to an unexpected loss.

Credit Risk
If Real Estate Investment Trusts become or are anticipated to become insolvent or to enter a state of holding excessive debt, there is a risk that the Fun will incur material losses.

Risk Contingent to the Lending of Real Estate Investment Trust Securities

The engaging in security lending incurs counterparty risk (the risk that the lending agreement is not honored or the agreement is canceled due to reasons including a counterparty’s bankruptcy) and could cause an unexpected loss as a result. Even when liquidating the position by offsetting it with the collateral upon the default of the lending agreement or cancelation of the agreement, there is the possibility that the acquisition cost of the security from the market may exceed the value of the collateral due to market price fluctuations. In such a case, the fund would need to make up for the price difference, and therefore incur a loss.

Risk of Discrepancies between Nikkei ESG-REIT Index and NAV

This Fund seeks to match the NAV volatility with that of the Nikkei ESG-REIT Index; however, we cannot guarantee that movements will be identical to those of the Index for the following reasons:

  • The potential market impact from the trading, etc., of individual issues when portfolio adjustments are made due to changes in the selected issues on the Nikkei ESG-REIT Index or capital transfers, or the costs borne by the Fund such as trust fees, brokerage commission, and audit costs, etc.
  • The timing and amount of payment for the distribution of the Fund will not be completely the same as the distribution from the underlying stocks.
  • Fees may be earned for securities lent.
  • When derivative transactions such as futures are made, there may be disparity between the price movements of all or some of such transactions and that of the Nikkei ESG-REIT Index.

Discrepancy between the market prices at which units are traded on financial instruments exchanges and the NAV
This Fund is listed on and will be publicly traded on the Tokyo Stock Exchange; however, the market price of units will depend mainly on the Fund's demand, its investment performance, and how attractive it is to investors in comparison to alternative investments, etc. We cannot predict whether the units of this Fund will be traded at the market value, below the NAV or above the NAV.
*The factors that contribute to fluctuations in the NAV are not limited to those listed above.

Additional Considerations

  • The provisions stipulated in Article 37-6 of the Financial Instruments and Exchange Act (the “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.

Risk Management System

  • The departments in charge of risk management and compliance, which are independent from fund management departments, evaluate and analyze risks and performance, risk management, and monitor the status of legal compliance.
  • To maintain an appropriate management system, the departments in charge of risk management and compliance 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 May 2020, and may be subject to change in the future.