Nomura U.K. Ltd

Nomura Funds May 2006 EQUITY

Fund Price Changes

The fund outperformed the benchmark by 6 basis points over one month from 28 April to 31 May 2006. Since inception the fund has underperformed the benchmark by 8 basis points, delivering a performance of Investment Objective 38.91% verses 38.99% for the benchmark. In the year to date the fund has outperformed the benchmark To achieve long term capital growth by 54 basis points, delivering a performance of -1.58% versus -2.12 % for the benchmark. through investment in an actively managed portfolio of Japanese Performance for the Fund since Inception (Yen basis) securities listed/dealt on Regulated Markets in Japan and to outperform 1 month 3 month 6 month 1 Year YTD Since Inception* the Benchmark [Being the Morgan

28/4-31/5 22/2-31/5 30/11-31/5 25/5-31/5 31/12-31/5 12/4-31/5 Stanley Capital International Japan NAVps** % change -7.88 -0.13 6.11 44.89 -1.58 38.91 Total Return (Net of Tax) Index]. Index (MSCI Japan)*** -7.94 -0.95 4.83 45.02 -2.12 38.99 Launch date: 12 April 2005 Excess Return 0.06 0.82 1.27 -0.13 0.54 -0.08 Base Currency: Japanese Yen

*Inception date: 12th April 2005. **Net Asset Value per share (NAVps) is calculated by Nomura Bank (Luxembourg) S.A. according to the ISIN Code: LU0217998821 prospectus and market standards in Luxembourg. ***MSCI Japan is the Morgan Stanley Capital International Japan Total Return (Net of Tax) Index Source: Nomura Asset Management U.K. Ltd Bloomberg Code: Source: Nomura Asset Management U.K. Ltd NOMJAEQ LX Equity DES Nomura Japan Fund vs MSCI Japan (Total Return - Net Div)

162 Total Net Assets as at 31 May 06: 152 JPY 8,145,283,082.00 142 132 122 NAV Per Share as at 31 May 06: 112 102 JPY 138,905 92

5 5 5 05 05 05 5 5 05 05 05 05 05 06 06 06 06 06 6 6 6 r-0 r-0 y-0 n- n- l- -0 -0 p- t- v- v- c- n- n- b- r- r- r-0 y-0 y-0 Contact p p a Ju Ju -Ju ug ug e Oc o o e Ja Ja e a a p a a -A -A -M 8- 9- 0 -A -A -S 2- -N -N -D 4- 5- -F -M -M -A -M -M 06 27 18 0 2 2 10 31 21 1 02 23 14 0 2 15 08 29 19 10 31 Fund Reference Index Yuhki King

+44 (0)20 7521 2635 Source: Nomura Asset Management U.K. Ltd based on Net Asset Value per share calculated by Nomura Bank (Luxembourg) S.A. [email protected]

Monthly Performance Review for May 2006 Web site address The portfolio outperformed the MSCI Japan Index by 6 basis points (bp) in May. Positive stock selection http://www.nomura.com/nam-europe/funds results outweighed the negative outcome from the sector allocation strategy. This newsletter was prepared by Amid a downturn in the Japanese stock market, defensive sectors remained relatively firm and made up for Nomura Asset Management U.K. some of the underperformance they experienced during the bullish market conditions over the past year. Ltd. The contents of this report are not intended in any way to indicate or guarantee future investment The portfolio’s underexposure to the Medical and the Infrastructures sectors had a negative impact on the results as the value of investments relative performance. As for the stock selection results，our favoured holding within the Consumption sector, may go down as well as up. Yamaha, became a leading contributor, outperforming due to its reasonable valuations. Also, our core holding Values may also be affected by within the Information/System sector, , posted remarkable gains and added to the relative exchange rate movements and investors may not get back the full performance due to robust sales of its portable game equipment and the unveiling of a new game console amount originally invested. Before along with updated popular software titles. purchasing any investment fund or product, you should read the Market Outlook related prospectus and documentation in order to form your Following the steep sell-off in May, the Japanese equity market is now approaching the bottom of our own assessment and judgement expected trading range. Providing the Bank of Japan maintains its prudent approach to monetary policy and, to make an investment adjustment and long-term interest rates remain steady, then we are able to uphold our existing year-end decision. The prospectus is available from the Nomura Asset market forecast for the TOPIX index of approximately 1650. Nevertheless, as with any interruption to a long- Management U.K. Ltd website. term trend, we can expect elevated levels of volatility over the next few weeks. Nomura Asset Management U.K. Ltd. is authorised and regulated by the Authority.

Nomura Funds May 2006

Sector Allocation Top 5 Holdings (as at May 2006)

% of MSCI Portfolio Company Name Equity Portion NAM 10 Cluster % May 06 May 06

1 UFJ FG 6.16 Consumption 7.80 7.16 2 SUMITOMO FG 5.20 Medical 5.39 3.07 3 MOTOR 4.98 Infrastructures 12.40 6.30 4 JFE HOLDINGS 4.05 Machinery 5.80 9.02 5ROHM 3.99 Automobiles 10.69 12.47

Electronics 17.81 19.66

Commodities 13.65 16.79 Financials 19.69 18.67 Communication 2.49 2.35

Inform/System 4.27 4.50

Source: Nomura Asset Management Co. Ltd

Top 3 Positive Contributors* Top 3 Negative Contributors*

Company Name Company Name

1JFE HOLDINGS 1ROHM 2 YAMAHA 2 DOWA MINING

3 NINTENDO 3 TAKEDA PHARMACEUTICAL

*Performance contributors of the fund relative to the benchmark. Source: Nomura Asset Management Co. Ltd

Top 10 Positive Positions Top 10 Negative Positions

Company Name % of Betting Company Name % of Betting

1 NISSAN MOTOR 3.97 1 MOTOR -5.77 2 ROHM 3.60 2 MIZUHO FINANCIAL GR -2.80 3 JFE HOLDINGS 3.31 3 CANON -1.97 4 SUMITOMO MITSUI FG 2.98 4 TAKEDA PHARMACEUTICAL -1.86 5 DOWA MINING 2.11 5 MATSUSHITA ELECTRIC -1.72 6 1.95 6 -1.72 7 YAMAHA 1.68 7 -1.37 8 SUMITOMO TRUST & BANKING 1.61 8 MITSUBISHI -1.11 9 1.61 9 TOKYO ELECTRIC POWER -1.01 10 MITSUBISHI UFJ FG 1.59 10 MILLEA HOLDINGS -1.00

*Active weight of the fund relative to the benchmark. Source: Nomura Asset Management Co. Ltd

All proprietary of the MSCI indices are the property of MSCI. Reproduction, redistribution or any other form of transmission, in whole or in part, of any information concerning the MSCI Indices without MSCI’s prior written consent is strictly prohibited. Although MSCI obtains information for inclusion in or for use in the calculation of the MSCI indices from sources that MSCI considers reliable, MSCI does not warrant or guarantee the originality, accuracy and/or the completeness of any of the information.