Sumitomo Mitsui Asset Management

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"Our Commitment to Fiduciary Duties"
and "Our Fiduciary Action Plan"

<Our Commitment to Fiduciary Duties>
We Commit Ourselves to be "The Responsible Total Investment Services Provider"

In August 2015, Sumitomo Mitsui Asset Management Company, Limited formulated and announced "Our Commitment to Fiduciary Duties" and its specific measures as "Our Fiduciary Action Plan".
In "Our Commitment to Fiduciary Duties", we have expressed our determination and attitude toward a wide scope of clients; those who start building wealth, who already have investment experience, pensions, institutional investors and corporations, to be entrusted with their money.
Specifically, following "Principle First, Profit Later" of "SMAM Spirit", all SMAM staff will be committed to "provide total investment services in a responsible manner", when managing the funds. To carry out our responsibilities in every aspect of business, we hereby present detailed policies to meet our clients' needs at the highest possible standards.
To materialize our commitment, specific measures are formulated into "Our Fiduciary Action Plan". The details of “Our Fiduciary Action Plan” are posted in the next page. Furthermore, we also put the item number of the “Principles Concerning Customer-Oriented Business Conduct” by Financial Services Agency on “Our Fiduciary Action Plan”.
The “Common” business practices in the asset management industry shall be reviewed on a zero-base, from the customers' point of view. The progress of our action plan will be announced every six months on our website. The clients' opinions and assessments on our actions will help us to continue self-innovation.
SMAM will continue to reform itself in the asset management industry by carrying out its responsibilities as a responsible asset manager, to contribute to the economic growth by supplying proper risk money and steadily building clients' wealth.

We Commit Ourselves to be
"The Responsible Total Investment Services Provider"

Sumitomo Mitsui Asset Management, as an Asset Manager entrusted with our Clients' funds, will provide total investment services in a responsible, devoted and earnest manner.
This is our "Fiduciary Duty".
To achieve this goal, we will put our clients first and work on policies and projects in the areas listed below. For more detailed information, please have a look at our "Our Fiduciary Action Plan".

Investments

  • Contribute to building clients' wealth with advanced investment techniques
  • Invest clients' assets according to the clients' needs
  • Explain investment objectives and situations concisely
  • Become the top global asset manager in Asian Investment including Japan
  • Become the top runner in Japan in the SRI and ESG fields (*)

Product Development

  • Constantly provide high-quality products that meet global standards
  • Develop products which properly match the clients' needs
  • Set fees that are rational and that clients are comfortable with

Client Services

  • Provide earnest services to build long-term relationships with clients
  • Provide accurate and useful information and means to build clients' wealth
  • Never provide unsuitable products to clients
  • Prioritize helping clients understand our products easily

Management Infrastructure

  • Ensure transparency at all levels of management
  • Achieve global standards in human resources, systems and governance
  • Become No.1 in quality by improving operations
  • Always strive for improvement in productivity

* SRI: Socially responsible investment, ESG: Environmental, Social, Governance

Our Fiduciary Action Plan
(As of October 27th 2017)

Investments

Item#

Status/Period

Further increase transparency in exercise of voting rights to manage potential conflicts of interest and disclose the individual voting results of Japanese equities #3
Completed
Build up investment methodology equipped with excellent traceability that suits long term investment horizon, and conduct a thorough quality control of products #2
By March 2018
Build a proprietary “smart data base” which enhances research and investment operation #2
By December 2017
Offer the top quality Asian investment products with a combination of in-house investment capability and external partners’ capability #2
By March 2018
Enhance both quality and quantity in outputs of investment analysis for a long-term horizon such as the “Companies’ Competitive Assessment Reports” #2
In Progress
Promote engagement activity with investee company that helps improve the company’s enterprise value, and establish our own engagement investment method #2
In Progress
Position ESG assessment as the base of company analysis from the long-term point of view, and engage in the ESG investment proactively #2
In Progress
Promote infrastructure investments proactively that contribute to social sustainability #2
In Progress
Relocate the function of Asian and Oceania equity active investments to the Hong Kong subsidiary, and establish the “Asia Research Center” to strengthen global competitiveness #2
By March 2018
Materialize the long-term investment method as the basis of products that lead to higher customers’ satisfaction than bank deposits #2
Through FY2017
Start the next-generation quantitative investment organization by utilizing smart data base #2
By December 2017
Develop a new fund actively by seed funding #2
In Progress
Reduce transaction costs with trading functions upgraded by introducing advanced trade execution technology #2
In Progress
Product Development

Item#

Status/Period

Develop and market “Products leading to higher customers’ satisfaction than bank deposits” #2
By March 2018
Based on the "Basic Policy on Product Strategy", enhance the product development process which lives up to customer needs accurately #6
In Progress
Based on the “Basic Policy on Management Fees”, set management fee level that is reasonable and acceptable for customers #4
In Progress
Disclose funds’ payout policies and how to determine funds’ payout amount for each accounting period #5
In Progress
Develop new products for Asian Regional Funds Passport #2
Through FY 2017
Engage in advanced and new ground investment product development by working closely with Nikko Global Wrap Inc. #2
In Progress
Clients Services

Item#

Status/Period

Expand digital support line-up to customers such as digital contents and web seminars #5
In Progress
Enhance various services for customers to build a portfolio and to benefit from investment profit and risk management #6
In Progress
Expand the product line-up of publicly offered investment trusts for the direct sales through the internet #6
In Progress
Expand general sales of Defined Contribution (DC) fund series #6
In Progress
Expand educational activities for entry level customers to have better understanding and more knowledge on investments and wealth creation, by using a “Beginner's Pack” #5
In Progress
Increase the number of “Product Specialists” to enhance the consultation for customers #6
In Progress
Increase disclosure level of products’ net return after costs (net of fees, etc.) for customers’ better understanding #4
In Progress

Create disclosure material by using infographic* for clients to grasp structure of management fees and dividend amount more easily

*”infographic” is a coined word which combines “information” and “graphic”, and expression method to convey information easily

#5
By December 2017
Strengthen the management and process checking of customer services on a daily basis #3
In Progress
Increase online investment reporting by fund managers #5
In Progress
Listen directly to the customers’ voices and continue to improve services #6
In Progress

 

Management Infrastructure

Item#

Status/Period

Establish “Advanced Technology Promotion Team” in Operation&Systems Department and correspond to a digital disruption*

*Digital disruption means that existing industry is destroyed by digital technology and creates a new innovation

#2
In Progress since April 2017
Establish “Corporate Strategy TeamⅡ”in Corporate Strategy Department and build the mechanism that customers can work on assets building for each purpose while enjoying oneself, and promote the company-wide business reform by utilizing high information technology inside and outside of the company #2
In Progress since April 2017
Make a drastic reform in personnel system focusing on diversity and inclusion concept #7
By March 2018
Start creating an office environment which brings up staff's creativity and enhances productivity #7
In Progress since April 2017
Develop the system targeting at providing an easier to understand information, enabling the investment proposal to fit customers’ needs, by utilizing BlackRock Aladdin system #6
In Progress
Outsource the investment trust accounting business to State Street Trust Bank, with a view to lowering fee levels by reducing administrative costs and to enhance quality of the accounting business #2
By December 2017
Review every operational flow and a business manual aiming at the highest level of an internal control, which staffs can practice their own Fiduciary Duties #7
By March 2018
Undertake industry-university joint research for advanced field aiming at sophisticating investment methods to seek practical use of technology such as big data analysis #2
In Progress since February 2016

Hold an independent third-party committee every quarter to check the level and progress of fiduciary duties (e.g. managing conflicts of interest), and execute FD2.0* with suggestions by the external members of the committee

*FD2.0 is a new stage of fiduciary duties which SMAM embark on

#3
In Progress
Secure the independence of external board members, and clarify election standards and processes of the CEO and the executive officers #3
In Progress

※ Item # : the item number of the “Principles Concerning Customer-Oriented Business Conduct” formulated and announced by Financial Services Agency on March 30, 2017

SMAM Spirit Course of Action until SMAM Achieves Status as No. 1 in Japan in 2020

Principle First, Profit Later As a social institution, our top priorities are our social contribution and the interests of our customers
Originality & Ingenuity As a trendsetter in the industry, we actively take on challenges never attempted by others We aspire to create what is novel and unique
Initiative & Daring Whatever the task, we tackle it with initiative and produce results
Determination & High Aspirations Once we take on a challenge, we pursue it with determination to completion
United as One With a spirit of loyalty to the company and company-wide perspective, all executives and employees will unite and make a concerted effort to work toward our goal

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