August 9, 2024
Nomura Asset Management Co., Ltd.
Notice regarding written resolution for reverse share split and amendment to the basicterms and conditions of “NEXT FUNDS Nikkei 225 Double Inverse Index Exchange
Traded Fund”
Nomura Asset Management Co., Ltd. will proceed with a written resolution, as requiredby laws and regulations, for reverse share split and significant changes to the basic termsand conditions of the trust deed (hereinafter referred to as “the Amendments”) of theNEXT FUNDS Nikkei 225 Double Inverse Index Exchange Traded Fund (Code:1357)(hereinafter referred to as “the Fund”).
As a part of the procedures for the written resolution, we have set August 29, 2024 as
the record date and have determined that beneficiaries (holders of the Fund) in thebeneficiary registry as of the record date may exercise voting rights.
If, as a result of the procedures for the written voting, the total number of units ofbeneficial interests held by beneficiaries who approve the resolution (this includes
beneficiaries who are considered to be in favor of the resolution, and the same shall apply
hereinafter) is two-thirds or more of the total number of units of beneficial interests asof August 29, 2024, then we will notify the authorities, implement the Amendments tothe trust deed on December 11, 2024, and carry out the reverse split on December 17,2024 as the base date.
Moreover, in case of the reverse split and Amendments to the trust deed, we will makechanges to the creation/partial redemption units of beneficial interests and theconditions on the early termination with the effective date of the Amendments on thebasic terms and conditions of December 18, 2024, considering the total number of unitsof beneficial interests will decrease as a result of the reverse split.
1.

ETF

NEXT FUNDS Nikkei 225 Double Inverse Index Exchange Traded Fund (Code: 1357)
2.

Schedule
August 29, 2024: Record date of the written resolution

November 6, 2024 (Must arrive): Deadline for exercising voting rights on writtenresolution
November 8, 2024: Implementation date of the written resolution
Following is the schedule in the event the reverse split proposal and theAmendments are passed:
December 11, 2024: Effective date of the Amendments: (i)-B (The conditions areadded based on “the Operational Rules.”)
December 17, 2024: Base date for the reverse share split
December 18, 2024: Effective date for the reverse share split
December 18, 2024: Effective date of the Amendments: (i)-B (The changes to thebasic terms and conditions to clarify the initial principal are made.), (iii)-D, and (iii)E.
3.

Overview of Reverse Share Split and the Amendments on the trust deed(i)

OverviewA) The units of the beneficial interests held by the beneficiaries listed in the final
beneficiary registry on December 17, 2024 shall be consolidated at a ratio of ahundred per unit (1-for-100 reverse split). The trading unit will remainunchanged.
B) With regards to the reverse split in beneficial interests, the additional
conditions considering the implementation of the reverse split and changes toclarify the initial principal are made based on “Operational Rules Regarding
Book-Entry Transfer of Shares, etc.” established by the Japan Securities
Depository Center, Inc.
Furthermore, in case of the reverse split and Amendments on the trust deed,
the Fund will make changes to the creation/partial redemption units ofbeneficial interests and the conditions on the early termination, considering thetotal number of units of beneficial interests will decrease as a result of thereverse split.

(ii) Reasons
The Fund was launched on July 14, 2014 and has been operated approximately fora decade. However, the Net Asset Value per unit (NAV) has been on a downwardtrend since its inception, and while the NAV on the inception date was ¥528,203 (per100 units), it was ¥14,022 (per 100 units) as of July 31, 2024. Since a decrease in
the NAV of the Fund is likely to cause a relative decline in the accuracy of tracking
the benchmark index, and the price on exchanges has also fallen (the closing priceof the exchange as of July 31, 2024 was ¥141), there are concerns that a change by
one yen in the price on exchanges would have a greater impact. Accordingly, in order
to appropriately maintain the merchantability of the Fund, the reverse split will betaking place.
(iii) Impacts of Reverse Share Split
As a result of the reverse split, the total number of units of beneficial interests will
decrease to one-hundredth (1/100), but the total net assets per unit will increase by 100times. The total asset value of the Fund would theoretically remain unchanged except
for market trends and other factors.
A) Reduction of units and net assets as a result of reverse split
ExampleBefore Reverse Split

After Reverse Split

JPY 100

JPY 10,000

Units of the Fund

10,000 units

100 units

Total Net Assets

JPY 1,000,000

JPY 1,000,000

Net Asset Value perunitB) Handling fractions of less than one unit after consolidation of beneficial
interests
Fractions of less than one unit resulting from the reverse split of beneficial
interests will be sold in a lump sum, and the proceeds of the sale will be returnedto the beneficiaries in proportion to their shares.
(a) Beneficiaries who hold less than 100 units as of the base date for the reversesplit:
We will refund the proceeds of the sale according to the total number ofunits held.
(b) Beneficiaries who hold more than 100 units as of the base date for thereverse split:
As of the effective date of the reverse split (December 18, 2024), 100 units

of beneficial interests will be consolidated into 1 unit.
For the number of units not obtained by multiplying 100 units by whole
numbers (fractions of less than 100 units), the proceeds of the sale according
to the amount of the fraction shares will be refunded.
Number of units of beneficial

1-99 units

100 units or more

NoneHoldinterests
Holding beneficial interests after
December 18, 2024

beneficialinterestsin

multiples of 100 asofDecember

17,2024
Fractional beneficial interests

Refundby(Handling of portions less than 100

converting to cash

Same as the leftunits)
ExampleNumber of units of95 units

220 units

0 unit2 units

95 units

20 units

applicable to cash(Since it is less than(Thenumberofout (as of December

100 units, all units

units

heldofbeneficial interests
held as of December
17, 2024
Number of units ofbeneficial interests
held on and after
December 18, 2024
Number17, 2024)

ofunits

held will be eligible forcashing out.)asDecember 17, 2024,
subtracting
multiples

theof100,will be eligible forcashing out.)C) Scheduled suspension of acceptance of creation/partial redemption
We will suspend the acceptance of applications of creation and redemption for
the Fund due to the reverse split as follows.
DateCreation

Partial Redemption

December 13, 2024

(To be accepted)

To be suspended

December 16, 2024

To be suspended

To be suspended

December 17, 2024

To be suspended

To be suspended

Note: There is no impact on trades of the Fund on the Tokyo Stock Exchange.
D) Changes to the creation/partial redemption units of beneficial interests(changes of appendix table)
Before amendment

After amendment

20,000 units or more

200 units or more

*The change above applies to creation/partial redemption applications on or after
December 18, 2024.
*The creation/redemption units above are not applicable to trading on the Tokyo
Stock Exchange.
E) Changes to the conditions on the early termination

4.

Before amendment

After amendment…early termination shall be carried…early termination shall be carriedout if the number of units of beneficial

out if the number of units of beneficial

interests falls below 100,000 for

interests falls below 1,000 for

20 successive days, …

20 successive days, …

Written resolution
Beneficiaries as of August 29, 2024 may exercise their voting rights on this proposal
until November 6, 2024. If the proposal passes, the Fund will make the necessary
amendments to the basic terms and conditions of the Fund’s trust deed. If the
proposal does not pass, the Fund will not make the changes or proceed with reverse
share split.