2025 Fiscal Year Initiatives and KPIs Based on the 'Customer-Centric Business Operations Policy'

au Asset Management Co., Ltd. (hereinafter, 'the Company') is committed to conducting business operations in accordance with the 'Policy on Customer-Centric Business Operations' (hereinafter, 'the Policy') and publicly discloses its progress. The Company will continue to periodically review its disclosed metrics in line with the expansion of its business activities. Below is a report on the Company's initiatives for the 2025 fiscal year based on the Policy. For the correspondence with the Financial Services Agency's 'Principles for Customer-Centric Business Operations,' please refer to the 'Correspondence Table' in the format specified by the Financial Services Agency.

Principles for Customer-Centric Business Operations

1. Pursuit of Customers’ Best Interests [Principle 2]

The Company engages in direct and careful communication with customers through social media and other channels to develop products that meet their needs. In the 2025 fiscal year, as one response to investors’ over-concentration in U.S. equities, the Company launched the 'auAM Leverage Hang Seng China Fund (JPY/HKD share classes)' and the 'auAM Leverage All Country Fund' (nickname: LebaKan). To strengthen asset management capabilities, the Company has fully leveraged its proprietary quant technology, significantly advancing its institutional investment engine and enabling the acquisition of clients across industries. The Company is also actively implementing this quant technology throughout all stages of investment management and is proactively reviewing trust fee levels to return efficiency gains to investors.

2. Appropriate Management of Conflicts of Interest [Principle 3]

To ensure that customers’ interests are not improperly harmed, the Company has established a 'Conflict of Interest Management Policy' outlining fundamental guidelines and implements appropriate management based on this policy. The Company also conducts training on the 'Conflict of Interest Management Policy' to thoroughly instill awareness among employees.

3. Clarification of Fees Borne by Customers [Principle 4]

The Company strives to clearly explain the investment management fees and other charges and commissions borne by customers in investment trusts, specifying what each fee compensates for. The Company also makes efforts to clearly disclose information regarding fees in the individual-type defined contribution pension system, including payees.

4. Provision of Important Information in an Understandable Manner [Principle 5]

The Company is committed to ensuring and improving website accessibility, aiming to create a user-friendly website for everyone in accordance with the 'KDDI Web Accessibility Policy.'

＜Provision of Investment Education Information＞ The Company publishes the investment guidance column 'Money Recipe' on the 'au iDeCo' service website to help beginner investors start asset management with confidence.

Column View Count

Page Views (PV)

Total Column Views in FY2025

516,551

(Note)

Measurement period: April 1, 2025 – March 31, 2026

5. Provision of Suitable Services for Customers [Principle 6]

＜Provision of Investment Trusts for Long-Term Asset Formation＞ The four funds offered as investment options for the individual-type defined contribution pension 'au iDeCo' are designed to support long-term asset formation, with risk-return profiles adjusted to suit customer needs.

Company-Provided Funds Eligible for NISA and iDeCo

Fund Name

NISA

(Growth Investment Category)

NISA

(Tsumitate Investment Category)

iDeCo

au Smart Basic (Stable)

○

○

○

au Smart Basic (Stable Growth)

○

○

○

au Smart Prime (Growth)

○

-

○

au Smart Prime (High Growth)

○

○

○

auAM Future City-Related Equity Fund

(with currency hedge)

○

-

-

auAM Future City-Related Equity Fund

(without currency hedge)

○

-

-

auAM Nifty50 India Equity Fund

○

-

-

Average Holding Period of iDeCo Funds (by fund)

Fund Name

Average Holding Period

au Smart Basic (Stable)

8.7 years

au Smart Basic (Stable Growth)

15.3 years

au Smart Prime (Growth)

15.7 years

au Smart Prime (High Growth)

10.1 years

(Note) The theoretical average holding period is calculated as 'annual average balance ÷ annual total redemption amount' for FY2025 and differs from the actual average holding period (annual average balance is the average of monthly-end balances in FY2025). Balances and redemption amounts from point-based investments are excluded from the calculation.

Investor Returns of iDeCo Funds (by fund, rate)

Fund Name

Investor Return

au Smart Basic (Stable)

0.35%

au Smart Basic (Stable Growth)

0.91%

au Smart Prime (Growth)

1.73%

au Smart Prime (High Growth)

2.24%

(Note) The above investor returns are calculated by multiplying the weighted arithmetic average of monthly market value change rates by 12 to annualize. The calculation period is FY2025 (April 2025 – March 2026).

The monthly market value change rate (r) is calculated based on the following definition, excluding balances from the Company's seed money and balances and redemption amounts from point-based investments.

End-of-month balance = Prior end-of-month balance × (1 + r) + (Subscription amount - Redemption amount - Distributions) × (1 + r/2)

＜Provision of Investment Education Information and Experiences＞ The Company offers investment trusts linked to the 'au PAY Point Investment' service, allowing beginner investors to easily and freely experience investment (practicing asset management using points) with Ponta points.

Growth Rate of au PAY Point Investment Users

Point Investment User Growth Rate

Growth rate from March 31, 2025 to March 31, 2026

+13%

6. Appropriate Incentive Frameworks for Employees [Principle 7]

As an investment manager and defined contribution pension plan administrator, the Company continuously conducts compliance training aimed at preventing violations of laws and regulations and promoting corporate ethics, ensuring that each employee adheres to fiduciary duties and the duty of care.

Additionally, the Company has established a personnel and performance evaluation system that fairly assesses each employee’s contributions to customer-centric operations as part of the goal management system’s evaluation criteria, providing appropriate motivation.

Policy on Product Governance

1. Establishment of a Product Governance Framework [Supplementary Principle 1][Supplementary Principle 2]

The Company has established a 'Policy on Product Governance,' which is disclosed on its corporate website. Decisions regarding product suitability verification and identification of target customer profiles at the time of fund creation are made by the 'New Fund Establishment Committee.' Policies regarding post-launch quality management and improvement, including performance monitoring, product suitability, disclosure accuracy, analysis of distributor collaboration data, and feedback to distributors, are decided by the 'Management Committee.'

2. Product Development [Supplementary Principle 3]

The 'New Fund Establishment Committee,' the decision-making body for new product launches, handles both public and private