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. The NAV of the Fund may fall and investors may suffer a loss due to a decline in stock prices or deterioration in the financial conditions and business performance of an equity issuer.

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 movements or liquidity.

The prices of small- and mid-cap stocks and the stocks of emerging companies tend to fluctuate more than the average of the overall equity market, and may largely affect the Fund’s NAV.

2. Liquidity Risk
There is a risk that the Fund will incur unexpected losses when the market size or trading volumes are small. The purchase and sale prices of securities are influenced by the trading volume, resulting in the inability of the Fund to sell certain stocks in its portfolio at prices that are expected to be realized in light of the prevailing market trend, that a security can sold as appraised, or that the transaction volume is limited regardless of the price levels. As a result, the Fund may incur unexpected losses.

In general the market size and trading volumes for the small- and mid-cap stocks and the stocks of emerging companies tend to be smaller than the average of the overall equity market and are believed to have high liquidity risk.

3. Credit Risk
There is a risk that the Fund will incur material losses in the event of a 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's NAV.

4. Security-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 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.

<Risk of Discrepancy between TOPIX and NAV>

This Fund seeks to match the NAV volatility with that of the TOPIX, 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 selected issues on the TOPIX or capital transfers, or costs borne by the Fund such as trust fees, brokerage commission, and audit costs, etc.;
• Dividends may be paid by stocks in the portfolio and 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 TOPIX.

◇Discrepancy between the market prices at which stocks are traded on financial instruments 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.

*The factors that contribute to fluctuations in the NAV are not limited to those listed above.

Other Items to Consider

• These materials are distribution materials created by Nikko Asset Management in order to increase investors' understanding of “Listed Index Fund S&P Japan Emerging Equity 100”.
• Unlike bank deposits or insurance policies, investment trusts are not protected by the Deposit Insurance Corporation or the Insurance Policyholders Protection Corporations. Nor are investment trusts protected by investor protection Funds when purchased at banks or other registered financial institutions.
• Profits gained and losses incurred by the management of investment trusts all belong to the beneficiaries. Before or at the time of submitting your application for this Fund, please make the decision to invest carefully after taking the time to read the contents of the prospectus in detail and fully recognize the purpose of investment and risk factors.
• 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.