Investment Risks and Costs
Customers pay the following expenses.
- As consideration for investment advisory services, customers generally pay an investment advisory fee, set at a maximum of 95 basis points of the average annual net asset balance during the term of the contract, excluding taxes. Advisory fees are levied on a sliding scale according to the average annual net asset balance.
- Separate from investment advisory fees, securities trading consignment fees and expenses related to securities custody are also deducted from the contract assets when they are incurred. These fees vary depending on the status of the investments, and consequently, it is not possible to specify the rate or maximum amount in advance.
- Nomura Asset Management may, based on its discretionary investment decisions, purchase investment trust products under discretionary investment contracts. In such cases, investment trust management fees of 125 basis points (flat rate on the balance; excluding taxes) and sales company and management company fees to the amount of 53 basis points (flat rate on the balance; excluding taxes) will be incurred. When converting investment trusts to cash, a fee of 30 basis points on the converting net asset balance may be incurred. Moreover, at a maximum 20% of any increase in net asset balance may be paid as a performance fee by the customer.
In such cases, the investment advisory fees may be adjusted to avoid double payment of management fees. The adjustment calculation methods are specified in each contract, but the investment advisory fees less the investment management fees associated with that investment trust products shall be the investment advisory fees paid by the customer. Also, management fees paid to sales companies and management companies shall be paid from the investment assets (the customer does not pay these fees directly).
The financial instrument transactions conducted on behalf of the client shall include investments made in shares, bonds with new share warrants, public corporation bonds, and other instruments (including cases where investments are made via investment trusts), and consequently, the prices of shares and other investments may decline as a result of the effects of domestic and overseas economies and political circumstances, fluctuations in interest rates, and changes in the performance and financial standing of the issuing entities, resulting in investment losses.
Financial products may also make use of derivative transactions. Such transactions utilize leverage in excess of the initial margin amount, and if prices change as a result of the fluctuations in the securities and indexes that serve as the underlying assets, it is possible that losses in excess of the amount of the margin deposited will be incurred. Also, the leveraged rates vary continuously as a result of changes in investment policies and domestic and overseas market environments, and consequently they cannot be specified in advance. During the terms of derivative transactions, Nomura Asset Management shall deposit margins taken from the contract assets in amounts that it determines to be suitable based on calculations performed by the securities companies with which orders are placed.
Trade name: Nomura Asset Management Co., Ltd.
Financial Instruments Firm Registration No. 373 (Kinsho) issued by the Director of Kanto Local Finance Bureau
Memberships: Investment Trusts Association, Japan Securities Investment Advisers Association
