Risks and Expenses Associated with Investment Trust Products

Risks Associated with Investment Trusts

The net asset value of investment trust fluctuates due to the price movements of the investment securities held by the investment trust (assets denominated in foreign currencies are also subject to the exchange rate fluctuations). A loss may occur when the net asset value declines and this may lead to a decrease in the principal investment.  All profits and losses generated from the investment management attribute to the investors. Therefore, unlike bank deposits, neither the principal investment nor the certain level of investment performance is guaranteed.


Expenses Associated with Investment Trusts

The following fees are to be charged to the investors of our investment trusts.

Fees to be charged directly

Purchase fee Maximum 3.85% (tax included)
Redemption (cancellation) fee Maximum 1.10% (tax included)
Partial redemption charge Maximum 0.50%

Fees to be charged indirectly during the holding period

Management fee Maximum 2.255% per annum (tax included)
Other Expenses

The following fees and commissions are also charged and to be deducted from the trust assets:

・Audit fees
・Brokerage commissions and other fees charged to traded securities
・Custodian fees for oversea assets
・Derivative transaction fees

In addition, some investment trusts incur performance fees and they are to be deducted from the trust asset. When the fund invests to other funds, asset management fees and other expenses of those funds are to be charged indirectly to the investors. These expenses vary depending on the details of particular transactions, etc., and therefore the specific information on the price ceiling of the required expenses or the calculation method of these expenses could not be provided in advance.

* The actual amount of fees to be charged to the investors, their price ceiling, and the calculation methods to determine the amount vary by the holding period of each investment trust. Therefore, specific information on these fees could not be provided in advance.

* Fees listed above includes consumption tax.

Note:

The above risks and charges pertain to investment trusts in general. Fees listed above are the highest applicable rates among all investment trusts managed by SMDAM. As the risks and required expenses entailed by investment trusts vary by product, investors are required to carefully read through all relevant items within the investment trust summary prospectus and the other documents provided by distributors prior to signing a contract. Unlike bank deposits, savings, or insurance contract, investment trusts are not insured or guaranteed by the deposit insurance, saving insurance, or Policyholders Protection Corporation. Also, in case of purchase at Registered Financial Institutions, the investment trust will not be covered by Investor Protection Fund. Please note that redemption or cancellation of investment trusts could not be accepted if it falls on the closed period of the investment trust or domestic/overseas public holidays.

As of 31th March, 2022