Investment Principles against Specific Weapons Manufactures

The Daiwa Securities Group has established an "Environmental and Social Policy Framework" which prohibits financing where the use of proceeds is directed toward weapons of mass destruction / inhumane weapons manufacturing.

Daiwa Asset Management Co. Ltd. has also established the following basic policy:

Investment in companies involved in the development and manufacture of weapons of mass destruction such as nuclear, chemical, and biological weapons, as well as inhumane weapons such as anti-personnel landmines and cluster bombs, is generally prohibited.

However, in the case of index funds, our aim as the manager is to track the movements of the index. In accordance with our fiduciary duty to the beneficiaries, we will consider the index fund to be exempt from the application of this policy as long as it includes constituent stocks in the index.

In addition, if excluding securities issued by such companies which investment is prohibited may make it difficult to manage the fund in a manner faithful to its investment objectives, the policy may be exempted.

Given that the definition and scope of weapons of mass destruction and inhumane weapons are expected to change depending on social circumstances, we will review this policy as needed.