ASB Retail Unit Trusts

Transcription

1 29 June 2007 ASB Retail Unit Trusts INVESTMENT STATEMENT A simple and effective way to access investment opportunities in New Zealand and around the world.

2 > This document is an Investment Statement for the purposes of the Securities Act It was prepared as at 29 June A prospectus has been registered under that Act containing an offer of the securities to which this Investment Statement relates and a copy is available upon request. Neither the Manager, the Trustee, ASB Bank Limited or its subsidiaries (the Banking Group ), Commonwealth Bank of Australia, nor any other company in the Commonwealth Bank of Australia Group, nor any of their directors, nor any other person guarantees the securities offered in this Investment Statement (including the repayment of any capital invested) or the performance of those securities (including any of the investments or returns made in respect of the securities). The securities offered in this Investment Statement do not represent bank deposits or liabilities of the Banking Group or the Commonwealth Bank of Australia and are subject to investment risk including the loss of income and principal invested.

3 > Important information (The information in this section is required under the Securities Act 1978). Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. > Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Section Page No. 1 What sort of investment is this? 3 2 Who is involved in providing it for me? 13 3 How much do I pay? 14 4 What are the charges? 17 5 What returns will I get? 20 6 What are my risks? 28 7 Can the investment be altered? 31 8 How do I cash in my investment? 32 9 Who do I contact with enquiries about my investment? Is there anyone to whom I can complain if I have 34 problems with the investment? 11 What other information can I obtain about this investment? Calculate your Prescribed Investor Rate 36 1 In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of the prospectus on request.

4 > Choosing an Investment Adviser You have the right to request from any investment adviser a written disclosure statement stating his or her experience and qualifications to give advice. That document will tell you: > whether the adviser gives advice only about particular types of investments; > whether the advice is limited to the investments offered by one or more particular financial organisations; and > whether the adviser will receive a commission or other benefit for advising you. You are strongly encouraged to request this statement. An investment adviser commits an offence if he or she does not provide you with a written disclosure statement within five working days of your request. You must make the request at the time the advice is given, or within one month of receiving the advice. In addition: > if an investment adviser has any conviction for dishonesty or has been adjudged bankrupt, he or she must tell you this in writing; and > if an investment adviser receives any money or assets on your behalf, he or she must tell you in writing the methods employed for this purpose. Tell the adviser what the purpose of your investment is. This is important because different investments are suitable for different purposes. > ASB Investment Advisers ASB offers you access to a nationwide team of friendly, professional ASB Investment Advisers. ASB Investment Advisers are a dedicated, specialist team who will help you to achieve your investment and retirement goals. Their investment advice is complimentary and you are under no obligation to invest. The Investment Advisers are supported by a nationwide team of specialist investment accredited Personal Bankers who assist with investment enquiries and your everyday banking needs. To arrange an appointment with an ASB Investment Adviser or an investment accredited Personal Banker, phone us on ASB Funds

5 > 1. What sort of investment is this? The ASB Retail Unit Trusts are unit trusts established in accordance with the Unit Trusts Act What is a Unit Trust? A Unit Trust is an investment where individual unitholders ( Unitholders ) pool their savings. A Unit Trust is operated by a Manager (in the case of the ASB Retail Unit Trusts, this is ASB Group Investments Limited) who accepts contributions from a number of Unitholders, and then collectively invests those contributions in specified assets. The assets of a Unit Trust are held in the name of a Trustee (in the case of ASB Retail Unit Trusts, this is Trustees Executors Limited), on behalf of all the Unitholders in that Trust. Your personal investment in this pool is measured in units ( Units ). When you invest, you are effectively buying a number of Units at what is known as the entry unit price ( Entry Unit Price ). As the investments made by a Unit Trust rise or fall in value, so too will the value of each individual unit usually rise and fall (except in the case of the ASB Money Market Trust and the ASB Residential Mortgage Trust prior to 1 October 2007). The ASB Money Market Trust will have fixed Entry and Exit Unit Prices of 1.00 until and including 30 September 2007, while the ASB Residential Mortgage Trust has a fixed Entry Unit Price of and will have a fixed Exit Unit Price of 1.00 until and including 30 September Unit Trusts are a simple and effective way to diversify your funds across a wide range of different investment options. Unit Trusts allow you to diversify your investments to an extent which most individuals are not able to achieve on their own, because your funds are effectively pooled with those of other Unitholders. ASB Retail Unit Trusts The ASB Retail Unit Trusts range currently includes nine trusts ( Trusts ), which are available to retail Unitholders. Each Trust has a unique risk/return profile, and invests primarily in one main investment class. The ASB Retail Unit Trusts range is as follows: > ASB Money Market Trust > ASB Residential Mortgage Trust* > ASB Diversified Income Trust > ASB NZ Fixed Interest Trust > ASB World Fixed Interest Trust > ASB NZ Property Trust > ASB World Shares Trust > ASB NZ Shares Trust > ASB Emerging Markets Shares Trust * From 29 June 2005 the ASB Residential Mortgage Trust was closed to new investors. Units in the ASB Residential Mortgage Trust will continue to be issued prior to 19 July 2007 to investors who were existing Unitholders as at 29 June From 19 July 2007 the ASB Residential Mortgage Trust will be closed to all investors. Therefore from 19 July 2007, no Units will be issued in the ASB Residential Mortgage Trust. Investment Management Style A summary of the investments of each Trust is detailed on the following pages. Apart from the ASB NZ Property Trust, the ASB Residential Mortgage Trust, and the ASB Diversified Income Trust, each of the Trusts adopts an essentially index investment approach by investing in portfolios of assets, and/or wholesale investment funds, or trusts in an index or indices, which reflect the Trust s chosen investment market. This approach reduces the transaction and management costs of these Trusts. An investment asset mix for each of the Trusts is also described in the following sections. These mixes represent the benchmark mixes the Manager will aim to maintain as far as practically possible. However, you should be aware that the Manager, with the consent of the Trustee, can change the management approach, objectives, and the investment asset mixes of the Trusts (other than the ASB World Shares Trust and ASB NZ Shares Trust ) at any time. This flexibility ensures these Trusts, some of which are long term investment vehicles, can adapt to changes in the investment environment. You will be notified if any such changes occur. 3

6 > ASB Money Market Trust Objective To provide Unitholders with competitive returns consistent with a lower risk investment strategy. Risk profile Lower risk / return profile Time frame Short-term, three months plus - refer ASB Investment Guide Fees Service Fee 0.00% Management Fee 0.50% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.06% p.a. Next 50m 0.035% p.a. Thereafter 0.03% p.a. Management expense ratio 0.42% (for the year ended 31 March 2006) Income distribution period Monthly Nature of Investments The Trust primarily invests in money market deposits and aims to achieve an investment performance that tracks, as closely as possible, the NZX 90 day Bank Bill Index. The ASB Money Market Trust will have a fixed Entry and Exit Unit Price of 1.00 until and including 30 September For more information on the implications of fixed Entry and Exit Unit Prices, please refer to The return on your investment will be reflected in the following two ways on page 20. Regular Withdrawal Option Unitholders in the ASB Money Market Trust have a Regular Withdrawal Option whereby they can choose to request regular fortnightly or monthly withdrawals from this Trust. The Regular Withdrawal Option will withdraw Units from the Trust and deposit the proceeds in a nominated bank account. Please refer to Regular Withdrawal Option on page 32. for more information. Who should invest in this Trust? The ASB Money Market Trust should appeal to Unitholders who: > want a short-term, lower risk investment > seek regular income > wish to balance their investments with the consistent returns offered by cash investments > have an investment time frame of three months or more. Investment Asset Mix Benchmark % n New Zealand cash deposits 100 4

7 > ASB Residential Mortgage Trust From 29 June 2005, the ASB Residential Mortgage Trust was closed to new investors. Units in the ASB Residential Mortgage Trust will continue to be issued prior to 19 July 2007 to Investors who were existing Unitholders as at 29 June From 19 July 2007, no Units will be issued in the ASB Residential Mortgage Trust. Objective To provide Unitholders with competitive returns over timeframes greater than one year by investing (directly or indirectly) in loans secured by mortgages over properties in New Zealand. Risk profile Time frame Lower risk / return profile Short-term, one year plus - refer ASB Investment Guide Fees Service Fee 0.25% Management Fee 1.40% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.07% p.a. Next 200m 0.06% p.a. Thereafter 0.03% p.a. Management expense ratio 1.02% (for the year ended 31 March 2006) Income distribution period Monthly Nature of Investments The Trust invests in the NZ Mortgage Income Fund which is a group investment fund established under part 4 of the Public Trust Act 2001 and managed by the Manager. The NZ Mortgage Income Fund purchases interests in mortgages over property in New Zealand originated by a registered bank or other entity selected by the Manager. The Trust may also purchase interests in loans which are secured by registered first mortgages over property in New Zealand, and interests in the mortgages which secure the loans purchased by the Trust. An agreement ( the Sale, Nomination and Administration Agreement ) has been entered into between the Trustee, the Manager and ASB Bank Limited ( ASB ), pursuant to which the Trustee can, at the direction of the Manager, purchase a beneficial interest in loans, and the mortgages securing the loans, from companies within the ASB Group. Holding a beneficial interest means that the Trustee is not recognised as the legal owner of the relevant loans and mortgages, and may only sell the beneficial interest in those loans and mortgages subject to certain conditions. The market for on-sale may be small. The Trustee can only obtain legal title to the loans and mortgages if certain credit related events occur in respect of the ASB Group of companies. In the case of such investments, the income of the Trust is derived from the loan interest payments received. The Trust may only purchase an interest in loans which, at the time of the purchase, were equal to no more than 80% of the purchase price or the agreed value of the secured property. The investment guidelines followed by the NZ Mortgage Income Fund are consistent with those stated above. A pool of cash is maintained between the NZ Mortgage Income Fund and the ASB Residential Mortgage Trust for liquidity purposes. The Manager will set aside an amount out of income at the end of each month, which can be used toward meeting loan losses should they arise. The ASB Residential Mortgage Trust has a Fixed Entry Unit Price of and will have a Fixed Exit Unit Price of 1.00 until and including 30 September Regular Withdrawal Option Unitholders in the ASB Residential Mortgage Trust have a Regular Withdrawal Option whereby they can request regular fortnightly or monthly withdrawals from this Trust. The Regular Withdrawal Option will withdraw units from the Trust and deposit the proceeds in a nominated bank account. Please refer to Regular Withdrawal Option, on page 32 for more information. The exit fee is not applicable to withdrawals made via the Regular Withdrawal Option. This Trust s underlying investment exposure is relatively illiquid. Applications for withdrawals, including the Regular Withdrawal Option, may be deferred if the Trust does not have sufficient liquid investments from which to process these applications. Please refer to Withdrawals on page 21 for more information. Who should invest in the Trust? The ASB Residential Mortgage Trust, which was closed to new investors as at 29 June 2005 and will be closed to all investors from 19 July 2007, should appeal to Unitholders who: > want a lower risk investment > seek regular income > wish to balance their investments with the consistent returns offered by mortgage investments > have an investment time frame of one year or more. Investment Asset Mix Allowable range % n New Zealand residential loans n New Zealand cash

8 > ASB Diversified Income Trust Objective To provide Unitholders with a regular income over a two year plus time frame and to generate returns that outperform the NZX90 Day Bank Bill Index after adjusting for a 33% tax rate. Risk profile Time frame Lower risk / return profile Short to medium term, 2 years plus refer ASB Investment Guide Fees Service Fee 0.25% Transaction Allowance 0.10% Management Fee up to 1.15% p.a. of the gross asset value of the Trust* Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 100m 0.05% p.a. Next 150m 0.04% p.a. Thereafter 0.03% p.a. * The actual management fee for the ASB Diversified Income Trust will vary based on the actual asset allocation within the allowable ranges as set out above. Management expense ratio 0.76% annualised based on the period from establishment to 31 March See Management Expense Ratio section on page 19 for more details. The asset allocation and fee structure changed as of 29 August 2005 and as such the MER also reflects the prior management fee. Income distribution period Monthly Nature of Investments The Trust invests (directly or indirectly) in at call or short term securities, NZ loans secured by mortgages over properties located in NZ and International corporate debt securities. The Trust invests in the Colonial First State Wholesale Global Credit Income Fund. The aim of that fund is to generate an income based return over the medium term through exposure to a diversified portfolio of higher yielding international fixed interest investments. These investments include Australasian and overseas corporate bonds, high yield debt securities (including securities credit rated below BBB-), derivatives and cash. The Wholesale Global Credit Income Fund seeks to provide returns in excess of the UBS Warburg Australian Bank index, over rolling three year periods. The Fund is an Australian registered managed investment scheme actively managed by Colonial First State Investments Limited, and has a current rating of A/MR2, representing Moody s opinion of, respectively, the investment quality and market risk of the Fund. A market risk of MR2 means that the Wholesale Global Credit Income Fund has been rated as having a low sensitivity to changing interest rates and other market conditions. The Trust also invests in the NZ Mortgage Income Fund which is a group investment fund established under part 4 of the Public Trust Act 2001 and managed by the Manager. The NZ Mortgage Income Fund purchases interests in mortgages over property in New Zealand originated by a registered bank or other entity selected by the Manager. The Trust may also invest in the Investors Wholesale Cash Trust, a New Zealand wholesale unit trust managed by the Manager. The Wholesale Cash Trust invests primarily in New Zealand cash deposits and short term securities to provide an income based return. However, it is anticipated that the majority of the cash deposits and short term securities of the Trust will be held in the NZ Mortgage Income Fund in which the Trust will invest a proportion of its assets. There is no double charging of management fees on any investment in the Investors Cash Wholesale Trust or the NZ Mortgage Income Fund. The Manager uses foreign exchange contracts or derivatives to reduce the risk of currency movements. The risk of movements in interest rates is reduced through the use of derivatives. A small pool of cash is also retained by the Manager for liquidity purposes. Regular Withdrawal Option Unitholders in the ASB Diversified Income Trust have a Regular Withdrawal Option whereby they can choose to request regular fortnightly or monthly withdrawals from this Trust. The Regular Withdrawal Option will withdraw Units from the Trust and deposit the proceeds in a nominated bank account. Please refer to Regular Withdrawal Option on page 32 for more information. The Exit Fee is not applicable to withdrawals made via the Regular Withdrawal Option. Who should invest in this Trust? The ASB Diversified Income Trust should appeal to Unitholders who: > want a lower risk investment > are comfortable to invest in a diversified portfolio of international corporate debt securities that includes below investment grade securities > seek regular income > have an investment time frame of two years or more. Investment Asset Mix Benchmark % Allowable range % n International corporate debt securities n New Zealand loans and mortgages securing those loans n Cash deposits and short term securities

9 > ASB NZ Fixed Interest Trust Objective To provide Unitholders with competitive returns consistent with a conservative investment strategy. Risk profile Lower risk / return profile Time frame Medium-term, five years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 0.85% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.075% p.a. Next 50m 0.06% p.a. Thereafter 0.04% p.a. Management expense ratio 0.75% (for the year ended 31 March 2006) Income distribution period Quarterly (31 March, 30 June, 30 September, 31 December) Nature of Investments The Trust invests in a portfolio of New Zealand Government fixed interest securities that attempts to match the composition and weightings of the NZX Government Stock Index. The Trust also holds a portfolio of New Zealand corporate fixed interest securities that attempts to match the composition and weightings of the NZX A Grade Corporate Bond Index. A small pool of cash is also retained by the Manager for liquidity purposes. In addition to the Management Fee referred to above, the Manager is entitled to receive a fee for additional investment management services in respect of the Trust s portfolio of New Zealand fixed interest securities. Please refer to Management Fee on page 18 for more details. Who should invest in this Trust? The ASB NZ Fixed Interest Trust should appeal to Unitholders who: > want a lower risk investment > wish to balance their investments with the relatively consistent returns offered by fixed interest securities > have an investment time frame of five years or more. Investment Asset Mix Benchmark % n New Zealand cash 2 n New Zealand Government fixed interest securities 49 n New Zealand corporate securities 49 7

10 > ASB World Fixed Interest Trust Objective To provide Unitholders with competitive returns consistent with a conservative investment strategy. Risk profile Lower risk / return profile Time frame Medium-term, five years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 0.85% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.075% p.a. Next 50m 0.06% p.a. Thereafter 0.04% p.a. Management expense ratio 0.78% (for the year ended 31 March 2006) Income distribution period Quarterly (31 March, 30 June, 30 September, 31 December) Nature of Investments The Trust primarily invests in the SSgA Fixed Income Index Trust, which is an Australian wholesale unit trust managed by State Street Global Advisers, Australia Limited. The SSgA Global Fixed Income Index Trust attempts to match the composition and weightings of the Citigroup World Government Bond Index by investing in a portfolio of diversified government bonds of countries situated in a number of continents, which will usually include the United States of America, Japan, Germany, the United Kingdom, France and Canada. The ASB World Fixed Interest Trust s investment in the SSgA Global Fixed Income Index Trust is 100% (plus or minus 2.5%) hedged back into New Zealand dollars. A small pool of cash is also retained by the Manager for liquidity purposes. In addition to the Management Fee referred to above, a fee may be paid in respect of investment management services to State Street Global Advisers, Australia Limited. This fee will be charged to the Trust. Please see Management Fee on page 18 for more details. Who should invest in this Trust? The ASB World Fixed Interest Trust should appeal to Unitholders who: > want a lower risk investment > wish to balance their investments with the relatively consistent returns offered by fixed interest securities > have an investment time frame of five years or more. Investment Asset Mix Benchmark % n New Zealand cash 2 n World Government bond portfolio 98 Includes the following countries: United States, Japan, Germany, United Kingdom, France and Canada 8

11 > ASB NZ Property Trust Objective To provide Unitholders with long-term capital growth through investing in a diversified portfolio of New Zealand property investments. Risk profile Medium risk / return profile Time frame Long-term, eight years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 1.50% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.07% p.a. Next 50m 0.06% p.a. Thereafter 0.05% p.a. Management expense ratio 1.21% (for the year ended 31 March 2006) Income distribution period Six monthly (31 March, 30 September) Nature of Investments The Trust predominantly invests in the AMP Investments NZ Property Fund which owns a diversified spread of commercial, industrial and retail property. The Trust also invests in companies listed on the New Zealand sharemarket which have a property emphasis. A small pool of cash is retained by the Manager for liquidity purposes. The Manager has appointed AMP Capital Investors (New Zealand) Limited to manage this Trust s portfolio of New Zealand property investments. In addition to the Management Fee referred to above, a fee may be paid in respect of investment management services to AMP Capital Investors (New Zealand) Limited. This fee will be charged to the Trust. Please see Management Fee on page 18 for more details. AMP Capital Investors (New Zealand) Limited is one of New Zealand s largest fund managers. Who should invest in this Trust? The ASB NZ Property Trust should appeal to those Unitholders who: > seek the potential for long-term capital growth > wish to invest in a well diversified portfolio of New Zealand property investments > have an investment time frame of eight years or more. Investment Asset Mix Benchmark % n New Zealand cash 2 n New Zealand property portfolio 70 n New Zealand property shares 28 9

12 > ASB World Shares Trust Objective To track, as close as practically possible, the performance of the AMP World Index (as adjusted for a 50% net currency hedge into NZ dollars) which is made up of shares in companies listed on major world sharemarkets. Risk profile Higher risk / return profile Time frame Long-term, eight years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 1.00% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.075% p.a. Next 50m 0.065% p.a. Thereafter 0.05% p.a. Management expense ratio 0.90% (for the year ended 31 March 2006) Income distribution period Six monthly (31 March, 30 September) Nature of Investments The Trust invests in AMP Investments World Index Fund, a fund managed by AMP Capital Investors (New Zealand) Limited. That fund holds a portfolio of international shares and attempts to match the composition and weighting of the AMP World Index by investing in companies situated in a number of continents and countries including the United Kingdom, Germany, Australia, Canada, the United States of America and Japan. To reduce the impact of currency movements, the Manager may take out currency hedging (by ASB) to New Zealand dollars from time to time. A small pool of cash is also retained by the Manager for liquidity purposes. In addition to the Management Fee referred to above, a fee may be paid in respect of investment management services to AMP Capital Investors (New Zealand) Limited. This fee will be charged to the Trust. Please see Management Fee on page 18 for more details. Who should invest in this Trust? The ASB World Shares Trust should appeal to Unitholders who: > seek the potential for higher long-term capital growth > are comfortable investing in higher risk investments and will accept a greater degree of volatility in Unit Prices > have an investment time frame of eight years or more. Investment Asset Mix Benchmark % Allowable range % n New Zealand cash n World portfolio of shares Includes the following countries: United States, United Kingdom, Japan, Germany, Canada and Australia 10

13 > ASB NZ Shares Trust Objective To track, as close as practically possible, the performance of the NZSX 50 Index, which comprises companies listed on the New Zealand sharemarket. Risk profile Higher risk / return profile Time frame Long-term, eight years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 1.00% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.075% p.a. Next 50m 0.06% p.a. Thereafter 0.05% p.a. Management expense ratio 0.96% (for the year ended 31 March 2006) Income distribution period Six monthly (31 March, 30 September) Nature of Investments The Trust invests in AMP Investments Tracker Fund, a fund managed by AMP Capital Investors (New Zealand) Limited. That fund holds a portfolio of New Zealand shares and convertible notes listed on the New Zealand Exchange. A small pool of cash is also retained by the Manager for liquidity purposes. In addition to the Management Fee referred to above, a fee may be paid in respect of investment management services to AMP Capital Investors (New Zealand) Limited. This fee will be charged to the Trust. Please see Management Fee on page 18 for more details. Who should invest in this Trust? The ASB NZ Shares Trust should appeal to Unitholders who: > seek the potential for higher long-term capital growth > are comfortable investing in higher risk investments and will accept a greater degree of volatility in Unit Prices > have an investment time frame of eight years or more. Investment Asset Mix Benchmark % Allowable range % n New Zealand cash n New Zealand portfolio of shares Includes the following companies: Telecom, Carter Holt Harvey, Contact Energy, The Warehouse and Sky Network. 11

14 > ASB Emerging Markets Shares Trust Objective To provide Unitholders with long-term capital growth through investing in a diversified portfolio of higher risk emerging markets shares. Risk profile Higher risk / return profile Time frame Long-term, twelve years plus refer ASB Investment Guide Fees Service Fee 0.50% Management Fee 1.00% p.a. of the gross asset value of the Trust Trustee Fee a percentage of the gross asset value of the Trust according to the following scale: First 50m 0.07% p.a. Next 50m 0.06% p.a. Thereafter 0.05% p.a. Management expense ratio 0.99% (for the year ended 31 March 2006) Income distribution period Six monthly (31 March, 30 September) Nature of Investments The Trust aims to achieve its objective by tracking, as close as practically possible, the performance of the Morgan Stanley Capital International Select Emerging Markets (Free) Index ( MSCI Emerging Markets Index ) which comprises listed companies located in emerging markets of Europe, Asia, Africa and Latin America. The Trust invests primarily in The Vanguard International Equity Index Fund Emerging Markets Portfolio ( The Vanguard Emerging Markets Fund ). This fund is managed by The Vanguard Group, one of the largest US mutual fund managers with total assets of over US750 billion as at 13 September The Manager has selected this fund because of The Vanguard Group s size, reputation and experience with passive investment management. The Vanguard Emerging Markets Fund holds a portfolio of shares in countries such as China, Brazil, South Korea, Taiwan, Israel, Mexico and South Africa, and attempts to match the composition and weighting of the MSCI Emerging Markets Index. A small pool of cash is also retained by the Manager for liquidity purposes. In addition to the Management Fee referred to above, a fee may be paid in respect of investment management services to The Vanguard Group. This fee will be charged to the Trust. Please see Management Fee on page 18 for more details. Who should invest in this Trust? The ASB Emerging Markets Shares Trust should appeal to Unitholders who: > seek the potential for higher long-term capital growth > are comfortable investing in higher risk investments and will accept relatively greater volatility in Unit Prices > have an investment time frame of twelve years or more. Investment Asset Mix Benchmark % n New Zealand cash 2 n Emerging Markets portfolio of shares 98 Includes the following countries: China, Mexico, South Africa, Brazil, South Korea, Taiwan and Israel. 12

15 > 2. Who is involved in providing it for me? The names of the ASB Retail Unit Trusts covered in this Investment Statement are: > ASB Money Market Trust > ASB Residential Mortgage Trust > ASB Diversified Income Trust > ASB NZ Fixed Interest Trust > ASB World Fixed Interest Trust > ASB NZ Property Trust > ASB World Shares Trust > ASB NZ Shares Trust > ASB Emerging Markets Shares Trust Each of these Trusts were established in October 1997 (other than the ASB Residential Mortgage Trust which was established in April 1999, the ASB World Fixed Interest Trust which was established in October 1999, and the ASB Diversified Income Trust which was established in January 2005) by a separate Unit Trust Establishment Deed, as amended from time to time (together the Establishment Deeds ) between the Manager and the Trustee. In addition, all of the ASB Retail Unit Trusts are governed by a Master Trust Deed, as amended from time to time ( the Master Deed ), which is also between the Manager and the Trustee. The ASB Residential Mortgage Trust was closed to new Unitholders with effect from 29 June Units in the ASB Residential Mortgage Trust will only be issued prior to 19 July 2007 to investors who were existing Unitholders as at 29 June 2005 and who have continued to be Unitholders. From 19 July 2007, no Units will be issued in the ASB Residential Mortgage Trust. The Manager and Promoter ASB Group Investments Limited is the Manager and Promoter of each of the ASB Retail Unit Trusts, and is a wholly owned subsidiary of ASB Group (Life) Limited and a related company of ASB. ASB is involved in the marketing and distribution of the ASB Retail Unit Trusts, but is not a promoter (as that term is defined in the Securities Regulations 1983) of the Trusts. ASB is also the Administration Manager of the ASB Residential Mortgage Trust. The Manager is responsible for the day to day management of the ASB Retail Unit Trusts. This includes the implementation of investment strategies and guidelines for each ASB Retail Unit Trust, monitoring the performance of any appointed Investment Managers, and administering and promoting the ASB Retail Unit Trusts. The directors of ASB Group Investments Limited as at the date of this Investment Statement are P S Hall, J W Duncan, J S N Mitchell, L A Wood, G H Burrett, S R S Blair and S B McRobie. The directors may change from time to time. The registered office of ASB Group Investments Limited and contact address for each director is: Level 28, ASB Bank Centre, 135 Albert Street (P O Box 35, Shortland Street), Auckland 1140, New Zealand. The principal place of business of ASB Group Investments Limited is: Level 1, Hurstmere Road, Takapuna, Auckland, New Zealand. You may also contact the Manager or ASB by phoning The Trustee Trustees Executors Limited is the appointed Trustee of each of the ASB Retail Unit Trusts. The Trustee monitors the Manager s compliance with the requirements of the Master Deed and each Establishment Deed. The Trustee is independent of the Manager and holds all of the assets of each Trust on behalf of all Unitholders. You may contact the Trustee by writing to: Trustees Executors Limited, Level 12, 45 Queen Street (P O Box 4197), Auckland, New Zealand. You may also contact the Trustee by phoning No Guarantors Neither the Manager, the Trustee, ASB or its subsidiaries (the Banking Group ), the Commonwealth Bank of Australia, nor any other company in the Commonwealth Bank of Australia Group, nor any of their directors, nor any person, guarantees the securities offered in this Investment Statement (including the repayment of any capital invested) or the performance of those securities (including any of the investments or returns made in respect of these securities). The securities offered in this Investment Statement do not represent bank deposits or liabilities of the Banking Group or the Commonwealth Bank of Australia, and are subject to investment risk including the loss of income and principal invested. It is impossible to predict future returns of the ASB Retail Unit Trusts and past returns are no indication of future performance. Returns may be negative and Unitholders may receive back less than their principal invested. 13

16 > 3. How much do I pay? Lump sum investment or regular savings plan You may invest in the ASB Retail Unit Trusts by way of lump sum investments, or by regular fortnightly or monthly savings, or a combination of both. You may vary your regular savings or suspend them at any time. Prior to 19 July 2007, investments in the ASB Residential Mortgage Trust will only be accepted from investors who were existing Unitholders as at 29 June From 19 July 2007, no investments will be accepted in the ASB Residential Mortgage Trust. Whether you choose to invest by way of lump sum investments or by regular savings will determine the minimum level of investment required in ASB Retail Unit Trusts. Those minimum levels, calculated (except in the case of the ASB Residential Mortgage Trust and the ASB Diversified Income Trust) by reference to your total investment in all ASB Retail Unit Trusts, are set out below. Minimum levels of investment in ASB Retail Unit Trusts > Minimum Lump Sum Investments Initial lump sum investment ASB Residential Mortgage Trust* and the ASB Diversified Income Trust 10,000 Initial lump sum investment all other ASB Retail Unit Trusts 2,000 Additional lump sum investment 500 > Regular Savings Plan** Minimum initial regular savings investment 100 Minimum regular savings contributions 100 each month, or 50 each fortnight > Minimum Holding*** ASB Residential Mortgage Trust and the ASB Diversified Income Trust All other ASB Retail Unit Trusts 10,000^ 2,000^ > Minimum Withdrawal Amount unless your entire investment in a Trust is being withdrawn 500 > Minimum Regular Withdrawal applies only to the ASB Money Market Trust, ASB Residential 100 each month Mortgage Trust and ASB Diversified Income Trust or fortnight > Minimum Switching Amount unless your entire investment in a Trust is being switched 500 * Maximum and minimum levels of investment in the ASB Residential Mortgage Trust. In the case of the ASB Residential Mortgage Trust only, the Manager may prevent any single Unitholder from holding more than 5% of the number of Units on issue in the Trust at that time, or from holding a portion of the Units on issue in the Trust which, when aggregated with the number of units on issue in the Trust held by associated persons (as defined in the Securities Act 1978) of that person, exceeds more than 5% of the number of Units on issue in the Trust at that time. ** The regular savings plan option is not available for the ASB Residential Mortgage Trust or the ASB Diversified Income Trust unless the minimum holding of 10,000 has been met. *** If the minimum holding is not maintained, the Manager has the discretion to implement a withdrawal of the investment and pay the withdrawal amount to you. Unitholders making regular savings contributions are not permitted to withdraw funds (other than the full amount) until the prescribed minimum holding is attained, but are not required to have reached this minimum holding until they have been investing in the ASB Retail Unit Trusts for two years. ^ After allowing for any adjustment for PIE tax on taxable income attributed to your Units in a Trust. See the Taxation Summary on page 23 for more information. The minimum investment amounts and holdings set out above may be varied from time to time by the Manager. 14

17 > How do I invest and who do I pay my money to? Initial and additional investments Investing in ASB Retail Unit Trusts is easy. You need only complete the attached application form and lodge it with any branch of ASB, your ASB Investment Adviser, or send it to ASB Group Investments Limited (Freepost Authority No. ASB BANK, P O Box 35, Auckland). You can authorise the transfer of investment amounts from your nominated ASB account by completing the appropriate sections of the application form. The Manager reserves the right to decline applications for any reason. Any application moneys received will be refunded in full in these circumstances. Applications received by the Manager before 5pm on any business day will normally be invested, if accepted, at the Unit Price for that day. After that time, applications received will normally be invested at the Unit Price applicable for the next business day. We recommend that you talk to an ASB Investment Adviser or investment accredited Personal Banker and complete an Investment Acknowledgment form. Where regular savings are made, the Unit Price will normally be calculated on the date the regular savings payment is received by the Manager. Regular savings plan If you want to invest under the regular savings plan, please complete the attached direct debit form together with the application form. The amount of your regular savings will be deducted from your bank account automatically. ASB Share Swap Service The ASB Share Swap Service is one way of exchanging your existing shareholdings in publicly listed companies for Units in the ASB Retail Unit Trusts. If you choose to use this service, ASB will arrange for the sale of your shares on your behalf. The scale of brokerage fees for shares sold by ASB on your behalf as at the date of this Investment Statement are shown below. Note: Pricing subject to change. Scale of Brokerage Rates (NZ) Shares) Scale of Brokerage Rates (Australian Shares) less than 50, % less than 50, % 50,000 and above 0.3% 50,000 and above negotiable minimum brokerage NZ30.00 minimum brokerage AU30.00 For shares sold by ASB on your behalf in any country other than Australia or New Zealand, brokerage fees are negotiable. For more information on the ASB Share Swap Service, contact an ASB Investment Adviser or an investment accredited Personal Banker by phoning 0800 ASB FUNDS ( ) or by visiting any ASB branch. 15

18 Telephone Transaction Service Once your application form has been accepted and your ASB Retail Unit Trusts investment processed, you can take advantage of our Telephone Transaction Service. If you hold a current ASB account, additional investments can be made by transferring funds from that account and investing them in your nominated ASB Retail Unit Trust. In addition, the Telephone Transaction Service lets you switch between Trusts and make withdrawals from any of the Trusts over the telephone (fees may apply). Using our Telephone Transaction Service is easy. Simply call us on 0800 ASB FUNDS ( ). Indemnities and releases The following indemnities and releases apply in relation to all transactions entered into through the Telephone Transaction Service. If you use the Telephone Transaction Service, you are deemed to have agreed to these conditions. > Subject to the following terms, the Manager agrees to act on telephone instructions communicated by you or your nominee or agent (as authorised by you in writing) for requests relating to any of: (i) The withdrawal of Units held by you; (ii) The switching of Units from one ASB Retail Unit Trust into those in another; (iii) The purchase of additional Units in an ASB Retail Unit Trust; and such withdrawals, switches, or purchases will be governed in all respects by the provisions of the Master Deed and each applicable Establishment Deed. > If you have jointly invested in ASB Retail Unit Trusts, the Manager may act on the telephone instructions of just one Unitholder. > You release, discharge and agree to indemnify the Manager and the Trustee from and against all actions, proceedings, accounts, claims, demands and liabilities arising from or in relation to telephone instructions. > You agree that neither you, nor your nominee or agent, will have any claim against any ASB Retail Unit Trust, the Manager, or the Trustee in relation to any payment made or purporting to be made pursuant to telephone instructions, notwithstanding that the payment relates to a request which has been made without your knowledge or authority, or in any other circumstances. > You will be asked to select a confidential customer password as part of this service. This password (in addition to any other identification or security requirements) will be required prior to processing any transaction. You will remain responsible for the confidentiality of the password and must not disclose it to any other person (including family members). > If deemed necessary by the Manager, telephone conversations may be electronically recorded, or additional means of identification requested prior to processing a transaction. Keeping you up to date Once your initial application is accepted, the Manager will register your name(s) on the ASB Retail Unit Trusts Register and mail to you an ASB Retail Unit Trusts Investment Certificate evidencing title to the Units purchased in ASB Retail Unit Trusts. The Manager will also send you a consolidated ASB Retail Unit Trusts Investment Certificate every six months to let you know how many Units you have purchased or withdrawn in the ASB Retail Unit Trusts during that period. This Investment Certificate will supersede all previous Investment Certificates sent to you and should be kept in a safe place. You may also request that a certificate be sent to you by writing to the Manager at the address set out on page 13 of this Investment Statement. The Manager may alter this procedure, if required, to comply with the Securities Act 1978 or the Unit Trusts Act

19 > 4. What are the charges? Summary of fees for ASB Investment Strategies Investment Strategy Current Total Initial Fees (% of the application moneys) Current Total Annual Fees (% of gross asset value) Conservative 0.425% % Moderate 0.450% % Balanced 0.450% % Growth 0.480% % Dynamic 0.500% % The above Investment Strategies are set out in the ASB Investment Guide. The annual fees will vary depending on the day to day valuation changes of the assets. What fees do I pay when I invest? ASB Retail Unit Trusts Current Service Fee paid to the Manager (% of the application moneys) Initial costs Current Transaction Allowance retained by the specific ASB Retail Unit Trusts (% of the application moneys) Total Initial Cost ASB Money Market Trust 0.00% 0.00% 0.00% ASB Residential Mortgage Trust 0.25% 0.00% 0.25% ASB Diversified Income Trust 0.25% 0.10% 0.35% ASB NZ Fixed Interest Trust 0.50% 0.00% 0.50% ASB World Fixed Interest Trust 0.50% 0.00% 0.50% ASB NZ Property Trust 0.50% 0.00% 0.50% ASB World Shares Trust 0.50% 0.00% 0.50% ASB NZ Shares Trust 0.50% 0.00% 0.50% ASB Emerging Markets Shares Trust 0.50% 0.00% 0.50% Note: All Entry Costs are factored into the Entry Price quoted for a Trust and are applied to every deposit to the particular Trust. Service Fee A Service Fee is deducted from all moneys invested in an ASB Retail Unit Trust (including regular contributions) and is paid to the Manager. The Service Fee is set from time to time by the Manager and can be no greater than 3% of the application moneys received, unless the Establishment Deed in respect of the relevant ASB Retail Unit Trust is first amended. The current Service Fees are set out in the above table. Transaction Allowance After deduction of the Service Fee (if any), moneys received for investment are used to acquire Units in the relevant ASB Retail Unit Trust. A Transaction Allowance for asset acquisition and selling costs may be retained by the Trust to help preserve equity between existing, new and outgoing Unitholders. This is not a fee payable to the Manager but is retained by the Trust you are investing in. Its purpose is to cover the costs of investing the application moneys in the assets of the relevant Trust and other administration costs relating to the issue or redemption of Units. The Transaction Allowance is set from time to time by the Manager and will not exceed 3% of the application moneys received, unless the Establishment Deed in respect of the relevant ASB Retail Unit Trust is first amended. The ASB Diversified Income Trust retains a Transaction Allowance of 0.10% of application monies. Currently, no Transaction Allowance is retained by any of the other ASB Retail Unit Trusts. 17

20 Switching between ASB Retail Unit Trusts As no Service Fee is currently charged in respect of the ASB Money Market Trust, Unitholders switching from that Trust will be required to pay the Service Fee of the Trust(s) into which they switch. Otherwise, neither a Service Fee nor a Transaction Allowance (with the exception of a switch into the ASB Diversified Income Trust) is charged on switching. Other fees No other fees are currently charged to the Unitholders when they initially invest. However, the Manager has the discretion to introduce certain other fees such as withdrawal, switching, or transfer charges. You will be notified in writing at least one month before any such charge is introduced. At the date of this Investment Statement, only the ASB Residential Mortgage Trust charges (and only in certain circumstances) a fee in respect of withdrawals. Such circumstances are outlined on page 19. What are the ongoing fees paid by the ASB Retail Unit Trusts? ASB Retail Unit Trusts Management Fee (% of the gross asset value) Trustee Fee (Maximum % of the gross asset value) ASB Money Market Trust 0.50% 0.060% ASB Residential Mortgage Trust 1.40% 0.070% ASB Diversified Income Trust up to 1.15% 0.050% ASB NZ Fixed Interest Trust 0.85% 0.075% ASB World Fixed Interest Trust 0.85% 0.075% ASB NZ Property Trust 1.50% 0.070% ASB World Shares Trust 1.00% 0.075% ASB NZ Shares Trust 1.00% 0.075% ASB Emerging Markets Shares Trust 1.00% 0.070% Note 1: Note 2. Management Fees do not appear on investors statements they are calculated on the total pool and primarily affect the overall return of the Fund. The Management Fee above does not include any fees payable in respect of investment management services provided by the parties performing such services as described below under the heading Management Fee. The annual fees will vary depending on the day to day valuation changes of the assets. The Trustee fee applied to each of the Trusts is calculated on a tiered basis as set out on pages 4 to 12. A minimum Trustee Fee applies. GST is currently payable on the Management Fee and Trustee Fee in part, as agreed with the Inland Revenue Department. Management Fee The Manager charges each Trust an annual Management Fee for investment management and other functions based on the gross asset value of the Trust calculated on a daily basis and payable quarterly in arrears. The Management Fee is set by the Manager from time to time and cannot exceed 3% annually of the gross asset value of each Trust calculated daily unless the Establishment Deed in respect of the relevant ASB Retail Unit Trust is first amended. The Management Fee (plus any GST) is paid from the funds of the relevant Trusts. The current Management Fees are set out in the table above What are the ongoing fees paid by the ASB Retail Unit Trusts? In addition to the annual Management Fee referred to above, a fee may be paid in respect of investment management services to the parties performing such roles within each Trust (the Investment Managers). These fees will be charged to the respective Trusts up to a maximum of 0.15% per annum of the proportion of the gross asset value of the respective Trust that each Investment Manager manages (plus any GST). They are calculated and accrued daily and paid quarterly. In cases where the remuneration payable to an Investment Manager exceeds 0.15% per annum of the proportion of the gross asset value of the respective Trust that each Investment Manager manages, the amount in excess of 0.15% is met by the Manager. 18