Nikko Asset Management Luxembourg S.A.
Remuneration Policy
May 2024
Last approved by the board of directors of the Company:
Last acknowledged by the conducting officers of the Company:

21 May 2024
3 April 2024

Previous version updated: 21 February 2023

Nikko Asset Management Luxembourg S.A.

Société Anonyme
Registered Office:32-36, Boulevard d’Avranches, L-1160, Luxembourg
Tel +352 264 979 2209 Email luxenquiries@nikkoam.com
https://emea.nikkoam.com/
RCS Number: B123103
VAT Number: LU 2204 2359
Authorised and Regulated by the Commission de Surveillance du Secteur Financier
Number S00000717

1.

Preamble

Nikko Asset Management Luxembourg S.A. (the "Company") qualifies as a management company under Chapter 15 of the
Luxembourg law of 17 December 2010 on undertakings for collective investment, as amended (the "2010 Law") and as an alternative
investment fund manager under Chapter 2 of the Luxembourg law of 12 July 2013 on alternative investment fund managers (the "AIFM
Law").
The Company is also authorised to carry out discretionary portfolio management services and investment advice in accordance with
Article 101(3) of the 2010 Law and Article 5(4) of the AIFM Law and reception and transmission of orders in relation to financial
instruments in accordance with Article 5(4) of the AIFM Law.
This remuneration policy (this "Policy") notably purports to fulfil the requirements of (i) Articles 111bis and 111ter of the 2010 Law,(ii) Article 12 and Annex II of the AIFM Law, (iii) the Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive
2014/65/EU of the European Parliament and the Council as regards organisational requirements and operating conditions for investment
firms and defined terms for the purposes of that Directive ("MiFID II Delegated Regulation"), (iv) Section 5.5.9 of CSSF Circular
18/698, and (v) the ESMA guidelines on sound remuneration policies under the UCITS Directive and the AIFM Directive, (vi) andCSSF Circular 23/841, on the application of the ESMA guidelines on certain aspects of MiFID II remuneration requirements.
In addition, the EU Sustainable Finance Disclosure Regulation (2019/2088) requires the Company, to include in its Policy information
on how it is consistent with the integration of sustainability risks. Sustainability risk means "an environmental, social or governanceevent or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment". The
same information (or a summary of it) must be published on Company's website.
The Company is for these purposes a "financial market participant". Accordingly, sustainability risks are risks which, if they were to
crystallise, would cause a material negative impact on the value of the investments made by the funds managed by the Company.
Having regard to the current structure of the Company, this Policy has been drafted taking into consideration the size, internalorganisation, nature, scope, and complexity of the Company's activities, as further detailed under point 4 below. It has been approvedby the board of directors of the Company (the "Board") on the date specified above.
This Policy and the practices thereunder reflect the objectives of good corporate governance and sustained, long-term value creation
for the shareholders/unitholders of the UCITS and AIFs managed by the Company and for the customers of the Company. This Policy
and the practices thereunder also aim to promote sound and effective risk management.
The Company’s branches are in scope of this Policy.
In the light of the similarities between the investment management activity and the discretionary portfolio management services
provided by the Company, the Company considers that the remuneration principles governing the Company acting as investment fundmanager, are effective for discouraging inappropriate risk taking and aligning the interest of the Company’s staff with those of theinvestors. The Company has therefore decided to apply those principles to all its activities including discretionary portfolio management
services, investment advice and reception and transmission of orders in accordance with Article 101(3) of the 2010 Law and Article
5(4) of the AIFM Law. It has also assessed compliance of this Policy with the MiFID Remuneration Guidelines (and in particularconflicts of interest and conduct of business rules applicable to it), it being noted that in accordance with item 9 of the MiFID
Remuneration Guidelines, the guidelines do not reflect absolute obligations. The rules detailed below will thus apply to all activitiesof the Company. In this context, all references to the UCITS/AIFs below should cover, where appropriate, DPM mandates (as defined
below).
2.

Scope of this Policy

For the purposes of this Policy, "remuneration" consists of:(i) all forms of payment or benefits including any cash allowances provided by the Company;(ii) any amount paid by the UCITS/AIF itself, including performance fees and carried interest as the case may be; and(iii) any transfer of units or shares of the UCITS/AIF in exchange for professional services rendered by the Company’s Identified
Staff (as defined below).
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If remuneration is based on fixed remuneration (payments or benefits without consideration of any performance criteria) it may include:(i) monetary payments or benefits (such as cash, shares, options or pension contributions); and(ii) non-monetary benefits (such as discounts, fringe benefits or special allowances for a car, mobile phone, etc.).
Remuneration may also comprise a variable component as further described below.
This Policy generally applies to the determination of the variable remuneration of the relevant Identified Staff member (as defined
below). But as far as MiFID services are concerned, it also applies to wage increases. In that context, the Company will make sure thatthe career promotion is not used to reintroduce quantitative commercial criteria upon which may depend the relevant person’s careeradvancement.
3.

Identified Staff

This Policy applies to the following categories of staff (the "Identified Staff") which comprise:(i) members of the Board;(ii) senior management (meaning the persons in charge of the day-to-day management of the Company - i.e. the conducting officersof the Company) (the "Conducting Officers");(iii) control functions(iv) any employee who receives total remuneration that takes them into the same remuneration bracket as senior management andrisk takers, whose professional activities have a material impact of the Company’s risk profile or the risk profiles of the
UCITS/AIF that it manages;(v) other risk takers
A list of all members of the Identified Staff is enclosed as appendix A.
The Company’s Board currently consist of six (6) members, (4 members from other group entities, 1 executive member who is also
employed by the Company and acting as conducting officer, and 1 independent director). The Board has delegated the day-to-day
business to four (4) Conducting Officers. The Company also has 1 further employee. Therefore, there is a total of 5 employees (4Conducting Officers and 1 employee) at the Company’s premises in Luxembourg. In addition, the Company’s branches outside of
Luxembourg have 4 employees.

4.

Proportionality principle

This Policy has been drafted in light of the size, internal organisation, nature, scope and complexity of the Company’s activities.
This Policy is in line with the business strategy, objective, values and interests of the Company and of the UCITS/AIF under management
and includes measures to avoid conflicts of interest.
The Company has decided to apply the proportionality principle on the basis of the size, internal organisation, nature, scope andcomplexity of the Company’s activities. Therefore, the following requirements of the ESMA Guidelines are disapplied:(i) variable remuneration in instruments;(ii) retention;(iii) deferral;(iv) ex-post incorporation of risk for variable remuneration;(v) establishment of a remuneration committee.
Indeed, the Company has non-complex and limited activity, as per provision 29.c) of the ESMA Guidelines, as the Company:(i) currently has five full-time employees in Luxembourg and four full-time employees at the branches;(ii) is managing low numbers of UCITS/AIF and discretionary portfolio management mandates (hereafter "DPM mandates"”)with relatively simple investment policies/risk profiles;(iii) the assets under management as of 31 December 2023 amounted to EUR 7.2 billion;(iv) the number of UCITS/AIF under management as of 31 December 2023 is 11 sub-funds under four umbrella funds.
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According to the requirement of the CSSF Circular 18/698, the Company has informed the CSSF of its proportionate approach tocompliance with the remuneration principles as above described.
The application of the proportionality principle will be reassessed by the Company on an annual basis.
5.

Remuneration principles

5.1
General principles
The remuneration of all Identified Staff (excluding the members of the Board) will be jointly determined by the Nikko AM Group’s
General Executive Committee ("GEC") and the Board, on the basis of the following criteria:
Qualitative criteria may include:• Knowledge & skills• Learning attitude• Risk management & governance• Adherence to applicable policies, processes & procedures follow up• Compliance with conduct of business rules (including the review of the suitability of the instruments sold to clients by therelevant persons, if relevant)• Fair treatment of clients• Leadership• Accountability• Alignment to client interests• Avoidance of conflicts of interests• Transparency• Market levels of pay• Consideration of sustainability risks in accordance with Article 5 of Regulation 2019/2088, where relevant for any particular
individual• Performance

Quantitative criteria may include:• Company and group levels of performance and profitability

In this document references to risks include, where relevant, sustainability risks (as and when applicable in relation to certain sub-fundsof the UCITS/AIFs and DPM mandates managed by the Company).
Conduct is also a consideration in the award of remuneration; individuals are expected to work and conduct themselves in line with the
Nikko AM Group’s core values of:• Stability• Diversity• Focus• Innovation• Teamwork• Communication

5.2

Variable remuneration

45.2.1

Principle of variable remuneration

Any payment of variable remuneration under any form whatsoever, paid directly by the Company or to the extent applicable, theUCITS/AIF themselves (including carried interest) and any transfer of units or shares of the UCITS/AIF to the Identified Staff, whereapplicable, should in all cases, except if such payment constitutes a reimbursement of expenses or a pro-rata return on investments
within the meaning of the ESMA Guidelines, follow the principles set forth hereunder:(i) The appropriate balance of remuneration components may vary across the Identified Staff, depending on their functions,activities, seniority and their personal achievements but the variable part of the remuneration should in principle not exceed afigure within the region of 50-100% of their annual fixed remuneration.
(ii) Due to the size, internal organisation, nature, scope and complexity of the Company's activities, the variable remuneration willconsist of cash and will not be paid in the form of units or shares of the UCITS/AIF concerned.
(iii) Based on the proportionality principle, the Company will not defer the variable remuneration. The amount of this variable
remuneration and the nature, size and complexity of the Company's activities do not justify such deferral.
(iv) Due to the size, complexity and nature of the Company’s activities, no performance adjustment measures will be implemented,
except with regard to the participative premium plans whereby the Identified Staff may participate in the positive results (profits)
generated by the Company (the "Participative Premium Plans") that might be implemented by the Company in accordancewith the relevant Luxembourg Laws.
(v) The variable remuneration will only be paid if it is sustainable according to the financial situation of the Company as a whole,and justified according to the performance of the business unit, the UCITS/AIF and the Identified Staff concerned. As a result,the variable part of the remuneration shall never be guaranteed and the Company reserves the right to not pay it (or to reduceit) if it is not sustainable.
(vi) The Company may nevertheless, on an exceptional basis, decide to guarantee the payment of exceptional variable remuneration(for the first year of employment) when hiring highly qualified new staff. In such a case, the Company will decide the terms
and conditions of such an exceptional bonus by taking into consideration the financial position of the Company and the
UCITS/AIFs managed by it. The number of new hires to whom such exceptional variable remuneration is expected to beawarded to is minimal.
(vii) All payments related to the early termination of an employment contract will reflect performance achieved over time and will
not be designed in a way that rewards failure.
(viii)The Company does not currently have any pension policy.

5.2.2 Performance evaluation
When the variable remuneration of the relevant person is performance related, it will be determined by (i) the outcome of theperformance evaluation of the relevant person and of the business unit or UCITS/AIF concerned and (ii) the overall result of theCompany, and (iii) the overall result of the group to which the Company belongs (the "Nikko AM Group").
A performance evaluation will be done, on an annual basis (the "Accrual Period"), to assess the individual performance of theConducting Officers, the persons heading the control functions and the rest of the Identified Staff. The performance evaluation will bedone in relation to the Accrual Period but will take into account the performance over a multi-year framework appropriate to the lifecycle of the UCITS/AIF or DPM mandates to be managed by the Company.
The performance evaluation will be done during the first quarter of the calendar year. The assessment of the performance of the relevant
person relates to financial and non-financial criteria. The appropriate mix of both criteria may vary depending on the tasks andresponsibilities of the staff member.

5The Company ensures that the performance evaluation used to calculate the variable remuneration takes into account the full range ofcurrent and potential risks associated with the activity of the Company.
The evaluation is also based on other criteria listed at clause 5.1 above.
The principles as defined under clause 5.2.2 do not apply to any Participative Premium Plans that might be implemented by the Company
in accordance with the relevant Luxembourg Laws.
5.2.3 Award process
Depending on (i) the performance of the Company and on the Nikko AM Group’s performance in the present financial year and(ii) following any discussions with the parent company, the GEC (together with the Board) will fix a global pool for the variable
remuneration component of the relevant persons. This pool will be allocated based on a performance management process as detailed
above. Risks are taken into account when the amount is determined by the Company.
After the Accrual Period the Company will translate the result of the performance management process into the variable remuneration
component for each staff member.
5.2.4 Risk mitigating features
In order to limit excessive risk taking:(i) there will be no variable remuneration paid by the Company for members of the Board, except for those who are not also
employees of the Company;(ii) the variable remuneration of the individuals eligible for variable remuneration will be both performance-based and risk
adjusted based on:
Individual annual performance;
The Company’s and the group’s performance.
In addition, the individuals will be required to undertake not to use personal hedging strategies or remuneration and liability related
insurance to undermine the risk alignment effects embedded in their remuneration arrangements. In accordance with the ESMA
Guidelines, insurances designed to cover personal payments such as healthcare and mortgage instalments should in principle be allowed.
In order to avoid any circumvention of the remuneration principles set forth herein, any insurance of such a kind shall be notified to theBoard, who shall, on a case-by-case basis, make sure that the latter is in line with the requirements set forth in the AIFM Law and the
UCI Law and, the case being, take appropriate measures to regularise the situation.
5.2.5 Recording of the determination of the overall variable remuneration
The Company will document the award process and ensure that records of the determination of the overall variable remuneration pool
are maintained.
5.3

Remuneration of the Board of directors

The remuneration of the members of the Board will be proposed by the GEC and fixed by the shareholders of the Company. Five (5) of
the directors are employed by entities within the Nikko AM Group, and one (1) director is independent from the Nikko AM Group. The
Nikko AM Group-related directors are not remunerated by the Company for their positions as Board members of the Company. The
other director is independent and is remunerated by the Company and receives a fixed annual directorship fee.
The remuneration of the non-executive Board members will in no case be linked to the performance and financial results of the Company.
There will be no variable remuneration paid by the Company for these Board members.
The remuneration of the Board is included within the figure for ‘Other Operating Charges’ within the profit and loss account of theCompany’s annual report.

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5.4

Remuneration of all Identified Staff other than the Board members

Remuneration of the Company’s employees
The remuneration level of the Company’s employees (including the Conducting Officers) is fixed by the Nikko AM Group’s General
Executive Committee with the aim of being sufficient to attract and retain qualified and experienced personnel and to ensure
independence in the performance of their role. Any remuneration awarded by the Company is aligned with the principles of:Sound and effective risk management
Compatibility with the Company’s long term business strategy
The fixed salary rewards employees for performing day-to-day responsibilities reflecting their function’s characteristics, their unique
set of competencies, and geographic location. This compensation is typically paid monthly over a twelve-month period.
The fulltime employees of the Company are eligible for variable remuneration in accordance with Section 5.2 above.
6.

Review and implementation of this Policy

The Company has delegated to Nikko Asset Management Europe ("NAME")’s HR advisory committee the task of ensuring that the
Policy is properly implemented, applied and monitored.
This Policy will be reviewed at least on an annual basis, as well as at the occasion of any relevant or significant amendment to thebusiness activities or structure of the Company.
The implementation of this Policy will be reviewed on an annual basis, which will assess whether and ensure that: (i) this Policy
operates as intended; (ii) all agreed plans/programmes are being covered; (iii) the risk profile, long-term objectives and goals of theCompany are adequately reflected; (iv) it is compliant with national and international regulations, principles and standards applicableto this Policy and (v) variable remuneration is not paid through vehicles or that methods are used which aim at artificially evading theprovisions in the AIFM Law, the UCI Law or the ESMA guidelines. Notwithstanding this delegation to NAME’s HR advisorycommittee, the oversight of the implementation of this Policy and its annual review shall remain the ultimate responsibility of the Board.
The compliance function, as well as, insofar as necessary, the Company’s external legal adviser, will be closely involved in reviewing
this Policy.
The risk management function assesses how the variable remuneration structure affects the risk profile of the Company. This function
notably validates and assesses risk adjustment data. The internal audit function periodically conducts an independent audit of the design,
implementation and effects of the Company’s remuneration policies.
Based on the outcome of this review, the Board will assess whether it is necessary to amend this Policy. This assessment shall be madeat least annually and each time a material change occurs that is likely to affect the Policy of the Company.
At the occasion of review, NAME’s HR advisory committee and the compliance officer will, under the ultimate responsibility of theBoard, ensure that:•

this Policy of the Company is consistent with and promotes sound and effective risk management, and:(i) is in line with the business strategy, objectives, values and interests of the Company and the UCITS/AIFs or DPM
mandates it manages,(ii) does not encourage excessive risk taking as compared to the investment policy of the UCITS/AIFs/DPM mandates
managed by the Company, and(iii) enables the Company to align the interests of the UCITS/AIFs and their investors and of the Company’s customers for the
DPM mandates with those of the Identified Staff that manages such UCITS/AIFs/DPM mandates, and to achieve andmaintain a sound financial situation;•

the Company’s overall corporate governance principles and structures, as well as their interactions with the remuneration
system are considered within the design and implementation of the Company’s remuneration policies and practices;7•the following elements are taken into account: the clear distinction between operating and control functions, the skills andindependence requirements of members of the Board, the safe-guards for preventing conflicts of interests and the internalreporting system and the related parties’ transactions rules; and•the delegates comply with section 8 of this Policy.

7.

Remuneration committee

The scope, nature and complexity of the activities of the Company being limited, the Board and the conducting officers consider thatno formal remuneration committee needs to be set up.
As and when the size and complexity of the Company warrants this, the Board may decide to establish a Remuneration Committee.
8.

Measure in case of delegation of portfolio management or risk management activities

When delegating investment management or risk management functions according to Article 110 of the UCITS Law and article 18 of
the AIFM Law, NAME’s HR advisory committee, in liaison with the compliance officer and on behalf of the Company, will ensure
that:•the entities to which investment management activities have been delegated are subject to regulatory requirements on
remuneration that are equally as effective as those applicable under the ESMA Guidelines; or•appropriate contractual arrangements are put in place with entities to which portfolio management or risk management
activities have been delegated in order to ensure that there is no circumvention of the remuneration rules set out in the ESMA
Guidelines and that the sustainability risks are considered in the remuneration arrangements of the entities. In accordance withthe guidelines, the contractual arrangements will cover any payments made to the delegates’ identified staff as compensation
for the performance of investment management activities on behalf of the Company.

The compliance officer will escalate any questions (including risk of non-compliance with UCITS/AIFM/MiFID II remuneration
requirements) to the Board.
8.1

Delegation arrangements

The Company has, subject to the continuous control and supervision and under the overall responsibility of the Company, appointed
the entities listed below as investment managers for Nikko AM Global Umbrella Fund, Nikko AM Global Umbrella Trust, Nikko AM
Global Investments (Luxembourg) and Nikko AM Global Alternative Investment Trust sub-funds:-

Nikko Asset Management Co., Ltd., Midtown Tower, 9-7-1 Akasaka, Minato-ku, Tokyo 107-6242, Japan.
Nikko Asset Management Co., Ltd. is licensed to provide, among others, non-discretionary investment advisory services anddiscretionary investment management services in Japan and registered as investment advisor with the US Securities andExchange Commission.

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Nikko Asset Management Asia Limited, 12 Marina View, #18-02 Asia Square Tower 2, Singapore 018961 (Business
Registration No: 198202562H).
Nikko Asset Management Asia Limited holds a Capital Markets Services Licence for the regulated activity of FundManagement, Dealing in Securities and Trading in Futures Contracts issued by the Monetary Authority of Singapore.

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Nikko Asset Management Europe Ltd, Level 5, City Tower, 40 Basinghall Street, London, EC2V 5DE, United Kingdom.
Nikko Asset Management Europe Ltd. is regulated by the Financial Conduct Authority in the United Kingdom.

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Nikko Asset Management Americas, Inc., 605 Third Avenue, 38th Floor, New York, NY 10158, USA. Nikko AssetManagement Americas, Inc. is a Delaware corporation, is registered as an investment adviser with the U.S. Securities andExchange Commission ("SEC") under the U.S. Investment Advisers Act of 1940, as amended, and as a commodity trading8

adviser with the U.S. Commodity Futures Trading Commission.
The Company has also appointed Nikko Asset Management Americas, Inc., as its delegate for a DPM mandate.
The Company will take steps to ensure that the delegate investment managers are subject to remuneration requirements which areequally as effective as the UCITS/AIF requirements, or alternatively will contractually impose the relevant remuneration guidelines
upon the relevant investment managers in order to ensure that there is no circumvention of the remuneration rules.
The Company does not currently and does not intend to delegate risk management functions to third parties.
9.

Prevention of conflicts of interest

The remuneration of the independent director and Conducting Officers has been negotiated at normal arm’s length rates for the type ofservices provided. The structure and amount of the remunerations does not, in the opinion of the Board, lead to any conflicts of interest
other than those which are otherwise inherent in their positions with the Company. The Company has a conflicts of interest policy, andconflicts are a fixed item on the agenda of every Board meeting. The Company is also organised internally with a view to minimise thepotential for conflicts of interest. This includes the removal of direct links between remuneration and activities where a conflict may
arise in relation to those activities.
This Policy has been designed to align the interests of the relevant persons and of the Company with that of the clients and to ensurethat the relevant persons will not be incentivised to favour its own interests or the Company’s interests to the potential detriment of any
client.
10.

Disclosure

10.1

Internal disclosureThis Policy will be accessible to all staff members, which will know in advance the criteria that will be used to determine theirremuneration.
The performance evaluation will be properly documented and transparent to the individual concerned. Confidential quantitative aspectsof the remuneration of staff members will of course remain confidential and will thus not be internally disclosed.
As and when requested, the information provided to individuals concerning variable remuneration may contain the following elements:(i) information on the criteria used for performance evaluation and the risk adjustment;(ii) information on the performance criteria on which the entitlement to shares, options or variable components of remuneration isbased, when applicable.
10.2

External disclosureThis Policy will be accessible to regulator and other state bodies who are officially entitled to request such Policy.
The Board shall ensure that the prospectus of the UCITS/AIFs managed by the Company shall contain either:•

the details of this Policy, including, but not limited to, a description of how remuneration and benefits are calculated and theidentity of the persons responsible for awarding the remuneration and benefits; or•a summary of this Policy and a statement to the effect that the details of this Policy, including, but not limited to, a descriptionof how the remuneration and benefits are calculated, the identity of persons responsible for awarding the remuneration andbenefits, including the composition of the remuneration committee should such a committee exist, are available by means of a
website – including a reference to that website – and that a paper copy will be made available free of charge upon request.

9The Board shall ensure that the Key Investor Information Document for each class of shares issued for UCITS/AIFs managed by theCompany shall include a statement to the effect that the details of this Policy, including, but not limited to, a description of how
remuneration and benefits are calculated, the identity of persons responsible for awarding the remuneration and benefits are available
by means of a website – including a reference to that website – and that a paper copy will be made available free of charge upon request.
The Board shall ensure that the annual report of the UCITS/AIFs shall contain such information on the remuneration payable by theCompany as foreseen by Article 151(3) of the 2010 Law and that the annual report of the AIFs shall contain such information on the
remuneration paid by the Company as foreseen by article 20(2) of the AIFM Law. In particular, such information shall encompass the
remuneration of the staff of the delegates of the Company to whom investment management has been delegated, in accordance with the
ESMA Q&A of 20 July 2022on the application of the UCITS Directive and the ESMA Q&A of 16 December 2022 on the applicationof the AIFMD.
This Policy shall be made available on the website of the Company https://emea.nikkoam.com/

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Appendix A – List of Identified Staff

Board member
Conducting Officer
Compliance Officer
Risk Manager
Internal Auditor
Branch Manager

Sales persons

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