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NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC.
CODE OF ETHICS
1. STATEMENT OF GENERAL FIDUCIARY PRINCIPLES
This Code of Ethics of Nomura Corporate Research and Asset Management
Inc. ("NCRAM") is based on the principles that (i) Access Persons (as such term
is hereinafter defined) owe a fiduciary duty to, among others, the shareholders
of the Fund to conduct their personal transactions in Securities in a manner
which neither interferes with Fund portfolio transactions nor otherwise takes
unfair or inappropriate advantage of an Access Person's relationship to the
Fund; (ii) in complying with the fiduciary duty, Access Persons owe shareholders
the highest duty of trust and fair dealing; and (iii) Access Persons must, in
all instances, place the interests of the shareholders of the Fund ahead of the
Access Person's own personal interest or the interests of others. For example,
in order to avoid the appearance of conflict from a personal transaction in a
Security, the failure to recommend that Security to, or the failure to purchase
that Security for, the Fund, may be considered a violation of this Code.
Access Persons must adhere to these general fiduciary principles, as well
as comply with the specific provisions of this Code. Technical compliance with
the terms of this Code will not automatically insulate an Access Person from
scrutiny in instances where the personal transactions in a Security undertaken
by such Access Person show a pattern of abuse of such Access Person's fiduciary
duty to the Fund and its shareholders or a failure to adhere to these general
fiduciary principles.
2. DEFINITIONS
(a) "Fund" means each investment company registered under the 1940
Act, and any series or portfolios of such Fund, for which NCRAM
acts as investment advisor or sub-investment advisor.
(b) "Access Person" means any director, officer, or Advisory Person of
NCRAM, and all relatives living within the same household as such
Access Person.
(c) The "1940 Act" means the Investment Company Act of 1940, as
amended.
(d) "Advisory Person" means (i) any employee of either NCRAM or of any
company in a control relationship to NCRAM who, in connection with
the employee's regular functions or duties, makes, participates
in, or normally obtains information regarding the current
purchases or sales of a Security by the Fund, or whose functions
relate to the making of any recommendations with respect to such
purchases or sales; and (ii) any natural person in a control
relationship to NCRAM who normally obtains information concerning
current recommendations made to the Fund with regard to the
purchases or sales of a Security.
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(e) A Security is "being considered for purchase or sale" when a
recommendation to purchase or sell a Security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such a
recommendation.
(f) "Beneficial ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934,
and the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership shall
apply to all Securities which an Access Person has or acquires. As
a general matter, "beneficial ownership' will be attributed to an
Access Person in all instances where the Access Person (i)
possesses the ability to purchase or sell the Securities (or the
ability to direct the disposition of the Securities); (ii)
possesses voting power (including the power to vote or to direct
the voting) over such Securities; or (iii) receives any benefits
substantially equivalent to those of ownership.
(g) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act.
(h) "Investment Personnel" include: Access Persons with direct
responsibility and authority to make investment decisions
affecting the Fund (such as portfolio managers); Access Persons
who provide information and advice to such portfolio managers
(such as securities analysts); and Access Persons who assist in
executing investment decisions for the Fund (such as traders). As
the context requires, "Investment personnel" may refer to one or
more Access Persons.
(i) "Purchase or sale of a Security" includes, inter alia, the writing
of an option to purchase or sell a Security.
(j) "Security" shall have the meaning set forth in Section 2(a)(3) of
the 1940 Act, and shall include: equity and debt securities;
options on and warrants to purchase equity or debt securities;
shares of closed-end investments companies; and Related
Securities. "Related Securities" are instruments and securities
that are related to, but not the same as, a Security. For example,
a Related Security may be convertible into a Security, or give its
holder the right to purchase the Security. For purposes of
reporting, "Security" shall include futures contracts. "Security"
shall not include: securities issued by the Government of the
United States (including short-term debt securities which are U.S.
government securities pursuant to Section 2(a)(16) of the 1940
Act); bankers' acceptances; bank certificates of deposit,
commercial paper; shares of registered open-end investment
companies; Securities which are not eligible for purchase or sale
by the Fund and such other instruments as may be determined by the
Fund's Board of Directors, from time to time.
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(k) "Public Company" means any entity subject to the reporting
requirements of the Securities Exchange Act of 1934.
3. EXEMPTED TRANSACTIONS
The prohibitions of Section 4 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control.
(b) Purchase or sales which are non-volitional on the part of either
the Access Person or the Fund, subject to the provisions of
Section 4(h) of this Code.
(c) Purchases which are either: made solely with the dividend proceeds
received in a dividend reinvestment plan; or part of an automatic
payroll deduction plan, whereby an employee purchases securities
issued by an employer.
(d) Purchases effected upon the exercise of rights issued by an issuer
PRO RATA to all holders of a class of its Securities, to the
extent such rights were acquired from such issuer, and any sales
of such rights so acquired.
4. PROHIBITED TRANSACTIONS AND ACTIVITIES
(a) No Access Person shall purchase or sell, directly or indirectly,
any Security in which he or she has, or by reason of such
transaction acquires, a direct or indirect beneficial ownership
interest and which he or she knows, or should have known, at the
time of such purchase or sale:
(i) is being considered for purchase or sale by the Fund; or
(ii) is being purchased or sold by the Fund.
(b) Inducing or causing the Fund to take action, or to fail to take
action, for the purpose of achieving a personal benefit, rather
than to benefit the Fund, is a violation of this Code. Examples of
this would include causing the Fund to purchase a Security owned
by the Access Person for the purpose of supporting or driving up
the price of the Security, and causing the Fund to refrain from
selling a Security in an attempt to protect the value of the
Access Person's investment, such as an outstanding option.
(c) Using knowledge of the Fund's portfolio transactions to profit by
the market effect of such transactions is a violation of this
Code. One test which will be applied in determining whether this
prohibition has been violated will be to review the Securities
transactions of Access Persons for patterns. However, it is
important to note that a violation could result from a single
transaction if the circumstances
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warranted a finding that the provisions of Section 1 of this Code
have been violated.
(d) All Access Persons are prohibited from acquiring any Security
distributed in an initial public offering, until trading of this
Security commences in the secondary market.
(e) All Access Persons are prohibited from acquiring Securities for
their personal accounts in a private placement without the express
prior written approval of the President of NCRAM (or his
designee). The President of NCRAM (or his designee) shall file
with the Compliance Director for NCRAM a copy of any such written
approval, accompanied by a memorandum detailing the reasons
supporting the approval. In instances where an Access Person,
after receiving prior approval, acquires a Security in a private
placement, the Access Person has an affirmative obligation to
disclose this investment to the President of NCRAM (or his
designee) if the Access Person participates in any subsequent
consideration of any potential investment, by the Fund, in the
issuer of those Securities. The Fund's decision to purchase
Securities of such an issuer (following a purchase by an Access
Person in an approved personal transaction) will be subject to an
independent review by the President of NCRAM, or his designee, so
long as the person conducting such review has no personal interest
in the issuer.
(f) All Access Persons are prohibited from executing a personal
transaction in all Securities (including transactions in pension
or profit-sharing plans in which the Access Person has a
beneficial interest), without express prior approval of the
President of NCRAM (or his designee). Notwithstanding the receipt
of express prior approval, any purchases or sales by Access
Persons undertaken in reliance on this provision remain subject to
the prohibitions enumerated in Section 4(g) and (h) of this Code.
(g) All Access Persons are prohibited from executing a personal
transaction in any Security on a day during which the Fund has a
pending "buy" or "sell" order for the Security, until the Fund's
order is either executed or withdrawn. All Access Persons are
prohibited from purchasing or selling any Security with seven (7)
calendar days before and after the Fund purchases or sells the
same Security. Transactions undertaken in violation of this
prohibition will either be required to be unwound, or any profits
realized by an Access Person on any personal transactions in
Securities within the proscribed periods (either undertaken while
the Fund has an open order, or within the 7-day blackout period)
will be required to be disgorged (to an entity designated by the
President of NCRAM [or his designee]), and the Access Person will
be subject to disciplinary action, as determined by the Compliance
Director for NCRAM or the Board of Directors of NCRAM.
(h) All Access Persons are prohibited from profiting in the purchase
and sale, or sale and
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purchase, of the same (or equivalent) Securities within 60
calendar days, if such Security was also in the Fund's portfolio
at the time of the Access Person's purchase or sale. Transactions
undertaken in violation of this prohibition will either be
required to be unwound, or any profits realized on short-term
trades will be required to be disgorged. For purposes of this
prohibition, each personal transaction in the Security will begin
a new 60-calendar day period. As an illustration, if an Access
Person purchases 1000 shares of Omega Corporation on June lst, 500
shares on July lst, and 250 shares on August 1st, the profit from
the sale of the 1000 shares purchased on June 1st is prohibited
for any transactions prior to October 1st (i.e., 60 calendar days
following August 1st). In circumstances where a personal
transaction in Securities within the proscribed period is
involuntary (for example, due to unforeseen corporate activity,
such as a merger), the Access Person must notify the Compliance
Director for NCRAM.
In circumstances where an Access Person can document personal
exigencies, the President of NCRAM (or his designee) may grant an
exemption from the prohibition of profiting in the purchase and
sale, or sale and purchase, of the same (or equivalent) Securities
within 60 calendar days. Such an exemption is wholly within the
discretion of the President of NCRAM (or his designee), and any
request for such an exemption will be evaluated on the basis of
the facts of the particular situation.
(i) All Access Persons are prohibited from receiving any gift, favor,
preferential treatment, valuable consideration, or other thing of
more than a de minimis value in any year from any person or entity
from, to or through whom the Fund purchases or sells Securities,
or an issuer of Securities. For purposes of this Code, "de MINIMIS
value" is equal to $100 or less.
(j) All Access Persons are prohibited from serving on the boards of
directors of any Public Company, absent express prior
authorization from the President of NCRAM (or his designee).
Authorization to serve on the board of a Public Company may be
granted in instances where the President of NCRAM (or his
designee) determines that such board service would be consistent
with the interests of the Fund and its shareholders. If prior
approval to serve as a director of a Public Company is granted, an
Access Person has an affirmative duty to recuse himself from
participating in any deliberations by the Fund regarding possible
investments in the securities issued by the Public Company on
whose board the Access Person sits.
(k) Subparagraphs (d) through (j) of this Section 4 shall not apply to
directors of NCRAM who are not Investment Personnel.
5. REPORTING
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(a) Every Access Person shall report to NCRAM the information
described in Section 5(b) of this Code with respect to
transactions (other than those personal transactions in Securities
exempted under Section 3 of this Code) in any Security in which
such Access Person has, or by reason of such transaction acquires,
any direct or indirect beneficial ownership.
(b) Every report shall be made not later than 10 calendar days after
the end of the calendar quarter in which the transaction to which
the report relates was effected, shall be dated and signed by the
Access Person submitting the report, and shall contain the
following information:
(i) the date of the transaction, the title and the number of
shares, and the principal amount of each Security
involved:
(ii) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) the price at which the transaction was effected;
(iv) the name of the broker, dealer or bank through whom the
transaction was affected; and
(v) if there were no personal transactions in Securities
during the period, either a statement to the effect or the
word "None" (or some similar designation).
(c) Any such report may contain a statement that the report shall not
be construed as an admission by the person making such report that
he or she has any direct or indirect beneficial ownership in the
Security to which the report relates.
(d) Every Access Person is required to direct his or her broker to
forward to the President of NCRAM (or his designee), on a timely
basis, duplicate copies of both confirmations of all personal
transactions in Securities effected for any account in which such
Access Person has any direct or indirect beneficial ownership
interest and periodic statements relating to any such account.
(e) Any Access Person who receives any gift, favor, preferential
treatment, valuable, consideration or other thing of value of more
than de MINIMIS value in any year from any person or entity that
does business either with or on behalf of the Fund (including an
issuer of Securities or any entity or person through whom the Fund
purchases or sells Securities) is required to report the receipt
of such gift to Compliance Director for NCRAM. This reporting
requirement shall not apply to:
(i) salaries, wages, fees or other compensation paid, or
expenses paid or reimbursed, in the usual scope of an
Access Person's employment responsibilities for the Access
Person's employer;
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(ii) the acceptance of meals, refreshments or entertainments of
reasonable value in the course of a meeting or other
occasion, the purpose of which is to hold bona fide
business discussions;
(iii) the acceptance of advertising or promotional material of
nominal value, such as pens, pencils, note pads, key
chains, calendars and similar items;
(iv) the acceptance of gifts, meals, refreshments, or
entertainments of reasonable value that are related to
commonly recognized events or occasions, such as a
promotion, new job, Christmas, or other recognized
holiday; or
(v) the acceptance of awards, from an employer to an employee,
for recognition of service and accomplishment; or
(vi) directors of NCRAM who are not Investment Personnel.
(f) Every Access Person shall report annually to NCRAM the following
information with respect to all Securities held by such Access
Person, which information must be current as of a date no more
than 30 days before the report was submitted:
(i) the title, number of shares and principal amount of each
Security in which the Access Person had any direct or
indirect beneficial ownership;
(ii) the name of any broker, dealer or bank with whom the
Access Person maintained an account in which any
securities were held for the direct or indirect benefit of
the Access Person; and
(iii) the date that the report is submitted by the Access
Person.
In addition, all Access Persons are required, on an annual basis,
to certify that they have received, read, and understand the
provisions of this Code, and they recognize that they are subject
to its provisions. Such certification shall also include a
statement that the Access Person has complied with the
requirements of this Code and that the Access Person has disclosed
or reported all holdings of or personal transactions in Securities
that are required to be disclosed or reported pursuant to the
requirements of this Code.
(g) Every Access Person, not later than 10 days after becoming an
Access Person, is required to report the following information:
(i) the title, number of shares and principal amount of each
Security in which the Access Person had any direct or
indirect beneficial ownership when the person became an
Access Person;
(ii) the name of any broker, dealer or bank with whom the
Access Person maintained
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an account in which any securities were held for the
direct or indirect benefit of the Access Person as of the
date the person became an Access Person; and
(iii) the date that the report is submitted by the Access
Person.
(h) All reports to NCRAM required hereunder shall be submitted to the
Compliance Director for NCRAM
6. SANCTIONS
Upon discovering a violation of this Code, the Board of Directors of
NCRAM may take such actions or impose such sanctions, if any, as it deems
appropriate, including, inter alia, a letter of censure or suspension, a
fine, or a recommendation of the termination of the employment of the
violator. (In instances where the violation is committed by a member of
the Access Person's household, any sanction would be imposed on the
Access Person.) The filing of any false, incomplete or untimely reports,
as required by Section 5 of this Code, may (depending on the
circumstances) be considered a violation of this Code.
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