FundFund

Summary of i Powerfund

あい・パワーファンド

Explanatory leaflet for investment trust (Issued prospectus) [Japanese Page]

Investment Risk

Fluctuation factors of NAV

・This fund invests in foreign exchange margin transactions that are exposed to market movements through investment trust securities and its NAV fluctuates.
Therefore preservation of investment capital is not guaranteed and there may be cases where loss is incurred and investment capital is impaired due to fall in net asset value of the fund.
Profit and loss of investment trust assets all belong to investors.
Investment trust is different to bank savings and deposits.

Risks associated with System Investment This fund makes investments through automated systems. Therefore any malfunctions in the automated systems may cause temporary halt to the investment process and cause decline in NAV.
Risks associated with trade executions Depending on the market conditions trades may be executed at different prices to the bid and offer in the market. This may cause loss of profit opportunities or actual losses.
Risks associated with arbitrage transactions Spot arbitrage strategy aims to execute both buy and sell of a same investment product. But depending on the market conditions only one side is executed or the amount of buy and sell may differ. This may cause loss of profit opportunities or actual losses.
Credit risks of brokers Credit conditions of brokers may deteriorate and there is a possibility that trades, settlements or return of margin deposits may become difficult. This may cause loss of profit opportunities or actual losses.
Foreign Exchange Risk In general, when Japanese Yen appreciates in the market, foreign assets lose its value in Japanese Yen and cause decline in NAV.
Country Risk Due to political and economic reasons including foreign exchange, capital restrictions and tax law change may cause difficulties in investment process and cause decline in NAV.
Leverage Risk Margin trades allow transactions much larger than the margin deposit. In general, larger the leverage, bigger the profit or loss that occur in a short period of time.
Conflict of interest Investment manager and its related companies of this fund can deal in other businesses and manage accounts of clients other than that of this fund. In such cases, transactions executed for these other clients can have negative effects on the prices of the investments in this fund. Also the investment manager of this fund can manage other funds with similar investment strategies. Therefore conflicts of interest may occur when the investment manager devotes its time and functions equally among these funds.

※Reasons for fluctuations in NAV are not limited to above.

Other points of attention

● Subscription of this fund is not covered by Financial Instruments and Exchange Law Clause 37-6 (Cooling off clause).
● This fund invests in designated investment trust securities part of which is managed by an external investment manager and the investment process can be hindered by changes in its business and assets, fund managers as well as other reasons. Review of the designated investment trust securities is aimed at enhancing the fund’s performance but can result in decline of NAV.
● In order to meet the redemption requirements, this fund may sell large amounts of investment trust securities or execute reverse trades. In such cases, sales and reverse trades may not be executed as planned depending on the market size and conditions and cause decline in the fund’s NAV.
● In case of large redemption requests, Spectra SPC-Powerfund JP Segregated Portfolio may stop, reverse or postpone these requests. In such cases, this fund may also reverse redemption requests or postpone payments. And in case of unavoidable situations such as closure of market exchanges, stoppage of foreign exchange transactions or a failure in settlement functions, this fund may stop accepting subscription and redemption requests or reverse these requests.
● Unlike bank savings and deposits, dividends are paid out of fund’s assets and the NAV of the fund will decline by the same amount. Dividends do not indicate the fund’s profit ratio as the dividends may exceed the profits made during the calculation period. And depending on the subscription price, the dividends may result in all or partial return of capital. It is the same when the rise in NAV is smaller than the dividend.

Risk Control Structure 

●Monitoring of investment risk and investment guidelines as well as investment analysis and evaluation is performed by the Compliance Department which is independent from the Investment Department.
●Compliance Risk Department reports to the Compliance Risk Committee and the latter make recommendations to the Investment Committee if any measures are required.
※Above risk control structure is as of the date of the fund’s registration statement and may change in the future.

Procedures and Fees

Subscription Memo

Subscription Unit Designated by brokers
Subscription Price NAV of the next business day of the subscription date (expressed as per 10,000 units).
Subscription Money Please pay by deadline designated by brokers.
Redemption Unit 1 unit (may differ between brokers).
Redemption Price NAV of the next business day minus trust asset reservation.
Redemption Proceeds Redemption proceeds will be paid from 8 business days after the termination date in principle.
Subscription/Redemption deadline time 3PM on business days.
Subscription Period From August 18 2020 to February 17 2021.
(It is renewed by submitting registration statement before the end of term.)
Non Subscription/Redemption Day Following are applicable days.
● Hong Kong or Cayman banking holidays
Redemption Restrictions Large redemptions may be restricted for the purpose of cash management of the trust assets.
Stoppage and Reversal of Subscription & Redemption In case of large redemption requests, Spectra SPC- Powerfund JP Segregated Portfolio may stop, reverse or postpone these requests. In such cases, this fund may also reverse redemption requests or postpone payments. And in case of unavoidable situations such as closure of market exchanges, stoppage of foreign exchange transactions or a failure in settlement functions, this fund may stop accepting subscription and redemption requests or reverse these requests.
Trust Period Until May 17 2029 (Launch date April 23 2019)
Early Redemption Trust will end if the investment fund ceases to exist. And if following reasons apply, trust may end with agreement with investors and trustee.
● If units fall below 500 million units
● If early redemption offer investors benefits
● If unavoidable reasons occur
End of fiscal period 17th of May and November of each year (following business day if the date falls on a holiday).
Dividend Payout Dividend will be paid twice a year. Dividend can be received in cash or reinvested. “Dividend Receipt Course” and “Dividend. Reinvestment Course” can be chosen. Please inquire brokers for details.
Trust Upper Limit 100 billion yen.
Public Notice Public notice will be made digitally on the homepage of investment management company. (http://www.igam.co.jp/).
Public notice will be made digitally on the homepage of investment management company. (http://www.igam.co.jp/). Investment reports will be published in May and November at the time of fiscal end and at the time of Redemption. They will be distributed to fund owners.
Tax Relations Tax will be applied as a stock investment trust. Public stock investment trust is applicable for Small Investment Tax Exempt System and Minors Small Investment Tax Exempt System. Dividend deduction is not applicable.

Fees & Taxes for the fund

Fees paid directly by investors
Subscription Fee Subscription fee is calculated by multiplying NAV by the fee rate set by each broker. Upper limit of the fee rate is 5.50% (5.00% excluding tax). Please inquire brokers for details
※ Subscription fee is charged for providing information on the fund and operational cost.
Management Fee(Trust Fee) Trust Asset Reservation Amount will be calculated by multiplying NAV by 1.00%.
Fees paid indirectly by investors
Management Fee(Trust Fee) Management Fee is calculated by multiplying NAV by 2.255% on annual basis (2.050% without tax).Management Fee is booked on daily basis and paid at the end of fiscal end or at the end of the trust period.
Management fees of this fund (trust fees) (annual rate). Annual 2.255% (ex Tax Annual 2.050%)
Distribution Investment
Company
Annual 1.100%~1.650% (ex Tax Annual 1.000%~1.500%)
Broker Annual 0.550%~1.100% (ex Tax Annual 0.500%~1.000%
Trustee Annual 0.055% (ex Tax Annual 0.050%)
Investment Destination Annual 1.911%(税抜 ex Tax 1.910%)around
Total Cost* Annual 4.166%(税抜 ex Tax 3.960%)around

Allocation ratios to the distribution companies differ according to their transaction balances. The details of the allocation ratios for the investment company and the distribution companies are as follow.

Transaction balances (for each distribution company)

Distribution
Investment
Company
Broker
1 billion yen or below. 1.650%(ex Tax 1.500%) 0.550%(ex Tax 0.500%)
More than 1 billion yen and equal to or below 3 billion yen. 1.3750%(ex Tax 1.250%) 0.8250%(ex Tax 0.750%)
More than 3 billion yen and equal to or below 10 billion yen. 1.2375%(ex Tax 1.125%) 0.9625%(ex Tax 0.875%)
More than 10 billion yen. 1.1000%(ex Tax 1.000%) 1.1000%(ex Tax 1.000%)

 

Duties Investment
Company
Making investment.
Broker Sending investment reports,managing client accounts, and providing information.
Trustee Management of trust assets,and execution of instructions from the investment company.

*Trust fee rate of this fund include trust fee rate charged by the invested fund to reflect the total cost to the investors. The actual trust fees change depending on how much is invested into the invested fund.

Performance Fees

●Performance fees will be charged depending on the performance of this fund.
●Performance fees are booked on daily basis if the NAV exceeds High-Water Mark. It is calculated as follows. Subtract High-Water Mark from NAV and multiply this number by 22.0% (20.0% ex tax). And multiply the result by the number derived by dividing total number of units by 10,000.

Performance Fee = (NAV of previous business day – High Water Mark x 22.0%.

● Calculation of High-Water Mark.

From launch date to the end of the first calculation period JPY 10,000 (Per 10,000 units)
End of each calculation after the above The base price of the previous business day is the High water mark at that time If it exceeds High watermark for the next term is calculated by subtracting dividends from the NAV one business day before the term end.
If not exceeded High-Water Mark would not change.

● Performance fee is charged at the end of each calculation period or at the end of trust period only when the NAV is above the High-Water Mark.
● In the case when the fund is partially sold during the calculation period, the performance fee is charged regardless of the NAV.
● Performance fee will be split between the investment company and the broker at the ratio of 50% each.
● When the dividends are paid out, the High-Water Mark will be adjusted to reflect the paid out dividends.
● Points of attention:
Performance fee is reflected in the value of daily NAV.
Therefore it will not be deducted additionally at the time of demption.
Performance fee is paid from the fund at the end of the calculation period but it is already booked as expense in its NAV so that it will not be deducted additionally.

Other Fees & Expenses

Below expenses will be paid out of the trust asset.
But the operational expenses within these expenses will be capped at annual rate of 0.200%
●Fees for security transactions (brokerage fees and custodian fees).
●Tax on trust assets.
●Expenses related to accounting.
●Expenses related to making and sending prospectus.
●Expenses related to making and sending investment reports.
●Expenses related to public announcements.
●Fees related to legal and tax consultations.
Audit fees will also be paid out of the trust assets.
Fees related to legal and tax consultations are also charged at the investment destination level.
※Audit fee is the fee paid to auditors for fund auditing.
※These fees vary depending on investment conditions and they cannot all be capped or stated beforehand.


◆Tax

Timing of taxation is as described below.
Tax rate below is for withholding tax on individual investors and may differ for other taxation methods.

Timing Tax Item Tax
At the time of dividend payout Income Tax and Local Tax

Taxed as income tax.*
20.315% for ordinary dividend.

At the time of cancellation and redemption

Income Tax and Local Tax

Taxed as capital gains tax*
20.315% for cancellation and redemption.

*Income tax, restoration special income tax and local tax will be charged.

※ If small investment tax free system “nickname:NISA” is used, income tax and capital gains tax will be spared for 5 years for investments up to 1.2 million yen per year.

People who can use small investment tax free system are at or above 20 years of age with certain requirements such as having a tax free account.

And if minor small investment tax free system “nickname:Junior NISA” is used, people below 20 years of age will be spared from income tax and capital gains tax for 5 years for investments up to 0.8 million yen.

Please contact brokers for details.

※It would be different for corporate clients.

※ Above tax system is as of end of May 2020 and tax rates may change if tax laws are revised. We recommend consultations with tax specialists for details.

Additional Information

Summary of the investment trust securities to be invested

Fund Name Spectra SPC ‒ Powerfund JP Segregated Portfolio
Fund Type Foreign investment trust securities (domiciled in Cayman Islands, yen denominated, company type).
Main Investment Foreign exchange margin transaction

Basic Investment Policy

①Invests mainly in foreign exchange margin transactions of developed country currencies.
②Investment strategy is spot arbitrage strategy.
③Trades are executed automatically based on the original model.

Investment policies and characteristics

①No foreign exchange hedges and made against Yen.
②Margins deposited in Yen are free from foreign exchange risks.
③Above investment strategy may not be possible depending on market and cash conditions.

Management Fee

Management fee is calculated by multiplying total net asset value by annual rate of 2.00%.
Other expenses include operational costs, tax on trust assets and fund audits.

Incentive Fee None.
Operational Company Maples Fund Services (Cayman) Limited
※Consigned to Maples Fund Services (Asia) Limited
Investment Company STI JP Limited
Investment Advisory Company
STI Asset Management Limited

 

Fund Name United Japanese Bond Baby Fund(for institutional investors)
Main Investment United Japanese Bond Mother Fund
Investment Policies and Characteristics

①Active investments aiming for long term growth of trust assets.
②Invests in Japanese bonds through Mother Fund.
③Actively changes duration based on fundamentals and interest rate analysis to obtain profits.
④Invests in investment grade bonds with AA or above rating to minimize credit risks.
⑤Investment policies above may become impossible due to market and cash conditions.

Trust Fees

Trust fee is calculated by multiplying total net asset value of trust assets by annual rate of 0.220% (0.200% excluding tax).

Investment Company I Global Asset Management Co.
Trust Company Mitsubishi UFJ Trust Bank

・Because this fund invests in volatile foreign exchange margin transactions through investment trust securities, the NAV of this fund will fluctuate.

This fund offered by I-Securities is not principal guaranteed and may result in losses due to fall in NAV. Please make sure to read explanation materials (Issued Prospectus) for details.


I-Securities Co.
Financial instruments business operator Kanto Financial Bureau No.236

 

Explanatory leaflet for investment trust (Issued prospectus) [Japanese Page]

Type I and Type II Financial Instruments Business (Director-General of the Kanto Finance Bureau (FIEA) Article 236),Commodity Futures Trading Dealers (OTC commodity derivative trading)
Member Associations:Japan Securities Dealers Association,Financial Futures Association of the Japan,Type Ⅱ Financial Instruments Firms Association,Japan Commodity Futures Association,Japan Investor Protection Fund,
Japan Cryptoasset Business Association member Membership number 1033

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Requests for materials are accepted through telephone.