Managed Portfolio Service. Investment Statement 27 November for information only

Transcription

1 Managed Portfolio Service Investment Statement 27 November 2015

2 This document is an Investment Statement for the purposes of the Securities Act 1978.

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: Page What sort of investment is this? 48 Who is involved in providing it for me? 48 How much do I pay? 49 What are the charges? 50 When seeking or receiving financial advice, you should check: What returns will I get? 53 What are my risks? 54 the type of adviser you are dealing with; Can the investment be altered? 56 the services the adviser can provide you with; and How do I cash in my investment? 57 the products the adviser can advise you on. for information A financial adviser who provides you only with personalised Who do I contact with inquiries about my investment? 59 financial adviser services may be required to give you a Is there anyone to whom I can complain if I have disclosure statement covering these and other matters. You problems with the investment? 59 should ask your adviser about how he or she is paid and any conflicts of interest he or she may have. What other information can I obtain about this investment? 60 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 that Prospectus on request. The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand s financial markets. The Financial Markets Authority s main objective is to promote and facilitate the development of fair, efficient, and transparent financial markets. For more information about investing, go to Financial advisers can help you make investment decisions Using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions. Financial advisers are regulated by the Financial Markets Authority to varying levels, depending on the type of adviser and the nature of the services they provide. Some financial advisers are only allowed to provide advice on a limited range of products. Financial advisers must have a complaints process in place and they, or the financial services provider they work for, must belong to a dispute resolution scheme if they provide services to retail clients. So if there is a dispute over an investment, you can ask someone independent to resolve it. Most financial advisers, or the financial services provider they work for, must also be registered on the financial service providers register. You can search for information about registered financial service providers at You can also complain to the Financial Markets Authority if you have concerns about the behaviour of a financial adviser. Important changes may be made to this Investment Statement from time to time. There is a registered Prospectus containing an offer of securities to which this Investment Statement relates. You can obtain a copy of the latest Investment Statement and the relevant Prospectus at any time from either your Authorised Financial Adviser or NZ Funds. The terms NZ Funds, we, us or our used throughout this Investment Statement refer to New Zealand Funds Management Limited as manager of the Portfolios. Other terms used in this Investment Statement are defined in the Glossary on page 62.

4 Contents section 1: Overview of the NZ Funds Managed Portfolio Service key information 3 about nz funds 6 how we manage investments 8 time frame, volatility and risk 10 the portfolios 12 section 2: Details of the NZ Funds Managed Portfolio Service what sort of investment is this? 48 who is involved in providing it for me? 48 how much do i pay? 49 what are the charges? 50 what returns will i get? 53 for what are my risks? information only 54 can the investment be altered? 56 how do i cash in my investment? 57 who do i contact with inquiries about my investment? 59 is there anyone to whom i can complain if i have problems with the investment? 59 what other information can i obtain about this investment? 60 how do i apply? 60 glossary 62 section 3: Application Forms and AML Forms application form 67 existing client application form 73 switch application form 77 direct debit form 81 aml forms why every investor must complete aml 83 for an individual 85 for a representative acting on behalf of a client 87 for a trust 89 for a company 91

5 section 1 Overview of the NZ Funds Managed Portfolio Service key 3 about nz funds 6 how we manage investments 8 time frame, volatility and risk 10 the portfolios overview 12 core cash portfolio 14 core income portfolio 17 global income portfolio 20 core inflation portfolio 23 property inflation portfolio 26 equity inflation portfolio 29 core growth portfolio 32 global multi-asset growth portfolio 35 global equity growth portfolio 38 dividend and growth portfolio 41 capital opportunities portfolio 44

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7 Key information Investment decisions are very important. They have long-term consequences. You should read all documents, including this Investment Statement, very carefully. We encourage you to ask questions of your Authorised Financial Adviser and/or seek other professional advice. What is the NZ Funds Managed Portfolio Service? The NZ Funds Managed Portfolio Service is a series of actively managed Portfolios offered and managed by New Zealand Funds Management Limited (NZ Funds). The Portfolios are designed to be used in combination, and not as stand-alone investments. It is generally intended that an investor will allocate their investment across all or a majority of the Portfolios within each investment category rather than investing in a single Portfolio or a single investment category. The Portfolios are designed to be used in conjunction with a financial planning process. The NZ Funds Managed Portfolio Service consists of the following 11 Portfolios: Core Cash Portfolio; Core Income Portfolio; Global Income Portfolio; Core Inflation Portfolio; Property Inflation Portfolio; Equity Inflation Portfolio; Core Growth Portfolio; Global Multi-Asset Growth Portfolio; Global Equity Growth Portfolio; Dividend and Growth Portfolio; and Capital Opportunities Portfolio. Each of the Portfolios is a collective investment vehicle. The money you invest into a Portfolio is combined with other investors money to purchase assets. A collective investment means your Portfolio holding represents a proportionate holding in the underlying assets of the Portfolio. This is not the same as direct ownership of the underlying assets. You will be allocated units in the Portfolio(s). The units represent your proportionate holding in the Portfolio(s). The number of units you are allocated is based on the price per unit, called the unit price. The performance of your investment will be measured by the rise or fall of the unit price. As the combined value of the assets owned by the Portfolio(s) increases or decreases, so too will the unit price. For more on the Portfolios, see the Overview on page 12 and pages 14 to 46. What are the key elements of the NZ Funds Managed Portfolio Service? contributions You may make lump-sum and/or regular contributions. There is no obligation for you to make any ongoing regular contributions once you have made your initial investment. issue of units The number of units issued will depend on the issue price for units of the relevant Portfolio. The issue price is essentially the net asset value of the Portfolio, plus an amount being NZ Funds estimate of the costs of acquiring the assets of that Portfolio, divided by the number of units on issue in that Portfolio. Further details on the calculation of the issue price are set out in the Prospectus for the relevant Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

8 withdrawals You can cash in your investment in any of the following ways: Switching between Portfolios (subject to redemption restrictions); Transferring your investments to another party; Redeeming units from the Portfolio by way of regular withdrawals (subject to redemption restrictions); or Redeeming units from the Portfolio by way of a lump-sum withdrawal (subject to redemption restrictions). The amount received for units on redemption is essentially the net asset value of the Portfolio plus an amount being NZ Funds estimate of the costs of disposing of the assets of that Portfolio divided by the number of units on issue in that Portfolio. For more on withdrawals, see How do I cash in my investment? on page 57. Who is involved in providing the NZ Funds Managed Portfolio Service? NZ Funds, who is the manager (the Manager) of the Portfolios; and The New Zealand Guardian Trust Company Limited, who is the trustee (the Trustee) of the Portfolios. For more on NZ Funds or the Trustee, see Who is involved in providing it for me? on page 48. What are the fees? investor fees No entry, exit or switching fees are currently charged. portfolio fees for target base fee information only NZ Funds has set a target base fee each Portfolio. The target base fee is not a separate fee, but a means of providing an indication of the level of fees and expenses that each Portfolio is expected to incur (excluding transaction costs, extraordinary fees and expenses, and performance fees charged by NZ Funds and external underlying investment managers). The fees and expenses that make up the target base fee are: trustee fee; management fee; and other fees and expenses. Each of these is discussed in more detail on page 51. The fees and expenses making up the target base fee are accrued and are reflected in the daily unit price of each Portfolio. At least once a quarter, the target base fee is compared to the actual fees and expenses and any necessary adjustments are made. This ensures that as much as possible all investors bear their fair share of the fees and expenses making up the target base fee. As at the date of this Investment Statement, the target base fees for the Portfolios (expressed as a percentage of the gross asset value of the relevant Portfolio) range from 0.40% to 2.99% per annum. For more on the target base fee and the fees and expenses that make up the target base fee, see What are the charges? on page 50. nz funds performance fee The following Portfolios may be charged a performance fee by NZ Funds. The performance fee is equivalent to 10% of the returns of a Portfolio in a financial year that exceed the current performance target of 8%. Core Growth Portfolio; Global Multi-Asset Growth Portfolio; Global Equity Growth Portfolio; Dividend and Growth Portfolio; and Capital Opportunities Portfolio. For more on the NZ Funds performance fee, see What are the charges? on page 50. authorised financial adviser fees Your Authorised Financial Adviser may charge fees for financial advisory services or other services they provide. Details of these fees are required to be outlined in their disclosure statements. Any fees related to financial advisory services or other services should be agreed between you and your Authorised Financial Adviser before an investment is made. For more on Authorised Financial Adviser fees, see What are the charges? on page 50. 4

9 What are the key factors affecting returns? Some of the key factors that can affect returns include: Investment performance; Fees and expenses; Portfolio size; Allocation of your investment between the Portfolios; The timing of contributions and/or withdrawals made by you; and Tax. A key factor influencing the returns of a Portfolio is the performance of the investment markets and the performance of the underlying investment assets chosen which can be influenced by many factors, including economic, political and other international events such as acts of terrorism or natural disasters. Neither NZ Funds nor any external underlying investment manager can control or guarantee the performance of investment markets or the performance of the underlying investment assets chosen. For more on returns, see What returns will I get? on page 53. What are my risks? Some of the primary risks of investing in a Portfolio include: Not getting back some (or all) of your money; Not getting the returns you expected; Not being able to leave a Portfolio when you want to; and Experiencing periods where your investment is worth less than it had been previously. for what are the key information factors affecting risk? only Some of the key factors affecting the primary risks of investing a Portfolio include: Market risk; Illiquid securities; NZ Funds active investment management approach; Wide investment mandates; Certain investment instruments and techniques; Investment in certain asset classes and/or collective investment vehicles; Key personnel of NZ Funds; Exposure to involved parties; and Insolvency or winding up. The above factors may adversely affect a Portfolio. If the impact of these factors causes a negative effect on unit price, you could receive back less than the amount of your investment. There are also other factors that may affect the risk of investing in a Portfolio (including factors that are unknown at the date of this Investment Statement). You should be aware that there is no promise or guarantee made by any person as to the performance of the Portfolios. For more on risk and the factors affecting it, see What are my risks? on page 54. Where to learn more Further information on topics covered in this Investment Statement is available where the following icons appear: Further information is provided elsewhere in this Investment Statement and/or in the relevant Prospectus. Further information is provided on our website or is available by contacting NZ Funds. There is also a Glossary on page 62 which has definitions of terms used in this Investment Statement. nz funds managed portfolio service : : investment statement : : 27 november

10 About NZ Funds NZ Funds is a wealth management company founded in We are a New Zealand firm focused on managing New Zealanders investments. Our goal is to help you make better financial decisions. We work with New Zealanders accumulating wealth for retirement, and then help manage that wealth in retirement. We take an integrated approach to wealth management. We believe the most reliable way to achieve your wealth objectives is through the integration of advice and investment management, supported by independent client-focused for research, local information and international specialist investment managers, and proprietary wealth technology. only Our Authorised Financial Advisers and the Authorised Financial Advisers that we partner with are focused designing a financial strategy that meets your objectives and ensuring that you make good financial decisions along the way. We do not believe that they also have the time to pick shares, bonds or investment managers. Instead your Authorised Financial Adviser is focused on ensuring your financial strategy is well documented and regularly discussed. Our portfolio management team manages the Portfolios you invest in. As an independent wealth manager we are not distracted by the requirement to manage bank or insurance money, nor are we involved in raising money from the public through bond or share issues. In seeking to meet the objectives of the Portfolios, we employ the services of a range of international specialist investment managers. Our integrated wealth management approach is delivered using our independent research and proprietary technology. Over the last twenty years we have developed NZ Funds Wealth Technology to help you model and understand the merits of different financial decisions. We have also built a library of independent research with topics as diverse as how your emotional temperament may alter the probability of you achieving your financial objectives and what elements of retirement lifestyle commonly cause over (and under) spending. NZ Funds senior management are significant indirect shareholders of NZ Funds. This means that they are shareholders of the company that owns NZ Funds. Many of our senior management team have been with the firm for a decade or more and bring significant tenure and experience to their roles. 6

11 Directors Our Directors are responsible for ensuring that this offer complies with the legal requirements regulating collective investment vehicles. Along with the senior management they ensure the Portfolios are appropriately governed, managed and administered. richard james chairman and chief executive dip.bus (finance), authorised financial adviser Richard joined NZ Funds in 1993 and has worked in a number of areas within the NZ Funds business over that time. Richard became a director of NZ Funds in August 2006 and was appointed Chief Executive in Richard is not an independent director as he is an employee of NZ Funds and has an indirect ownership interest in NZ Funds as the beneficiary of a trust. michael lang director and chief investment officer ba (econ), llb (hons) for Michael joined NZ Funds information He left NZ Funds to work overseas 2003 and returned Michael only was appointed Chief Investment Officer in 2009 and became a director of NZ Funds January Michael is not an independent director as he is an employee of NZ Funds and has an indirect ownership interest in NZ Funds as the beneficiary of a trust. philip doak director and principal, chief operating officer bcom. (ag), dip. applied finance & investment, ffin, authorised financial adviser Philip joined NZ Funds in 2005 and is responsible for NZ Funds operational functions and capabilities. He became a director of NZ Funds in September Before joining NZ Funds, Philip spent 16 years with Westpac where he held executive and general management roles. Philip is not an independent director as he is an employee of NZ Funds and has an indirect ownership interest in NZ Funds through the IGHL Trust. glenn wright director and principal bcom., bsc., dip.bus. (mktg), authorised financial adviser Glenn joined NZ Funds in 1988 when it commenced business. He currently leads NZ Funds adviser business. He became a director of NZ Funds in September Glenn is not an independent director as he is an employee of NZ Funds and has an indirect ownership interest in NZ Funds through the IGHL Trust. gregory horton independent director llb (hons), bcom. Gregory was appointed a director in May Gregory is a partner and a director of Harmos Horton Lusk Limited, a law firm based in Auckland. He has practiced law both in New Zealand and overseas. NZ Funds Directors and their details are correct as at the date of this Investment Statement. The Directors and/or their details may change. You may contact NZ Funds on or [email protected] to check NZ Funds current Directors and their details. For more on the team at NZ Funds, go to nz funds managed portfolio service : : investment statement : : 27 november

12 How we manage investments Investment Categories Each Portfolio in the Managed Portfolio Service is designed to meet the requirements of the relevant investment category. The broad objective of each investment category is as follows: Investment Category Objective Portfolios Cash To provide a source of capital, by primarily investing in incomeorientated assets using an active investment management approach. Core Cash Portfolio Income To provide exposure to income-orientated assets using an active investment management approach. Core Income Portfolio Global Income Portfolio Inflation To mitigate the impact of inflation on your investment over the Core Inflation Portfolio medium and/or long-term by investing in income-orientated Property Inflation Portfolio assets and growth-orientated assets using an active investment Equity Inflation Portfolio management approach. Core Growth Portfolio To grow your investment over the long-term by investing incomeorientated assets and growth-orientated assets using an active Global Equity Growth Portfolio Global Multi-Asset Growth Portfolio Growth investment management approach. Dividend and Growth Portfolio Capital Opportunities Portfolio The Portfolios are designed to be used in combination and not as stand-alone investments. It is generally intended that an investor will allocate their investment across all or a majority of the Portfolios within each investment category rather than investing in a single Portfolio or a single investment category. The Portfolios are designed to be used in conjunction with a financial planning process. We strongly encourage you to work with an Authorised Financial Adviser to develop a financial plan and a corresponding investment portfolio specific to your goals, investing time frame and attitude towards risk, and to regularly review your financial plan and investment portfolio with your Authorised Financial Adviser. Our active investment management approach We use an active investment management approach. Our active investment management approach seeks to maintain a balance between preserving your capital and growing your wealth in a manner that is consistent with each Portfolio s objective. In the investment management of the Portfolios, we may take a wide variety of actions. These actions may include, but are not limited to: altering the proportion invested in each security or asset class; altering the manner in which a Portfolio is exposed to each security or asset class; investing directly or indirectly; using derivatives and/or collective investment vehicles; applying hedging; taking short positions; or using leverage. An active investment management approach is subject to different risks (which may be considered higher risks) than a non-active investment management approach. As a result, our active investment management approach may cause the returns and capital stability of a Portfolio to significantly differ from the returns and capital stability of the underlying securities or asset classes utilised, and/or any benchmark index. The way in which our active investment management approach is implemented will change. This will result in the Portfolios being constructed with different combinations of assets, underlying investment managers and investment strategies. In order to allow these changes to occur, each Portfolio has a wide investment mandate. The Trust Deeds provide that the Portfolios may invest in a very wide range of assets. 8

13 NZ Funds has developed internal investment guidelines as part of its investment management process which assist in the oversight of each Portfolio. These guidelines are designed to ensure that each Portfolio invests in accordance with its investment objective and risk profile. Due to NZ Funds active investment management approach, the guidelines may be exceeded from time to time. Where this occurs, the Portfolio is either realigned to come within the guidelines, or the guidelines are changed to reflect a change in the implementation of NZ Funds active investment management of the Portfolio. It is therefore anticipated that the guidelines will change. You should be both aware of, and be comfortable with, NZ Funds active investment management approach before you invest in the Portfolios. If you do not feel comfortable you should not invest. For more on the Portfolios and NZ Funds investment management approach, see pages 12 to 46. For more on the internal investment guidelines, contact NZ Funds on or [email protected] The investment managers we work with The Portfolios may invest directly, or indirectly via Wholesale Trusts. A Wholesale Trust is a wholesale fund managed by NZ Funds which holds investments. Those investments may include directly held securities and/or investments in funds managed by either NZ Funds or external underlying investment managers. As at the date of this Investment Statement, the Portfolios only invest in Wholesale Trusts (with the exception of Cash and cash equivalents and derivatives). The Portfolios may invest directly in other asset classes or assets without notice to investors. The investments in the Wholesale Trusts are managed by NZ Funds and a range of specialist investment managers selected by NZ Funds. We refer to these specialist investment managers as external underlying investment managers. Different external underlying investment managers are selected where NZ Funds considers their investment approach will help meet the objectives of the Portfolios. The external underlying investment managers are monitored and reviewed, and are expected to change over time as part of our active investment management approach. For more on the external underlying investment managers, see pages 14 to 46 and Our use of derivatives and leverage In addition to understanding how we manage investments and our use of external underlying investment managers, it is important that you know that each Portfolio has the ability to use derivatives and leverage (other than the Core Cash Portfolio which is permitted to use derivatives but not leverage). Both NZ Funds, and many of the external underlying investment managers we work with, use these investment instruments and techniques. derivatives NZ Funds active investment management approach makes use of derivatives (for example, futures, options, forwards and swaps). A derivative is a financial instrument, the value of which is derived from changes in the value of another asset (for example, a share market index or a commodity index, an interest rate, or an exchange rate). Some examples of how derivatives may be used in a Portfolio include: to hedge or seek to mitigate unwanted risks; to modify a Portfolio s exposure to an asset and/or asset class; and to gain exposure to an asset and/or asset class in order to seek to enhance returns. The use of derivatives may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. leverage NZ Funds active investment management approach makes use of leverage. Leverage occurs where a Portfolio s economic exposure to assets is greater than the amount invested. Leverage occurs by borrowing to invest, or through the use of derivatives. The Portfolios may use leverage to seek to enhance returns and/or to seek to mitigate risk. Leverage can assist in mitigating risk where, for example, an investment is made in order to reduce the risk of potential adverse price movements in a security by taking an offsetting position in the same security or another security, the price of which is expected to move in the opposite direction. The use of leverage may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. For more on the use of derivatives and leverage by the Portfolios, see pages 12 to 46. nz funds managed portfolio service : : investment statement : : 27 november

14 Time frame, volatility and risk Make sure you invest for an appropriate period of time, Each Portfolio has a recommended investment time frame. In general, the more volatile the investments in a Portfolio, the longer the time frame you should be invested. This is because over longer time frames you are more likely, but not certain, to achieve an outcome consistent with the objective of the Portfolio. NZ Funds endeavours to manage the Portfolios so that the time frame of each Portfolio is consistent with the Portfolio s objective. It is however important to understand that the actual time frame required for you to achieve the objective may be shorter or longer than the recommended investment time frame. There is also the potential that any or all of the objectives may not be achieved over any time frame. In addition, NZ Funds active investment management approach may have either a positive or negative impact on the achievement of the objective over the recommended investment time frame. understand your investment will be exposed to volatility... Volatility is the variation value of your investment either up down. Each Portfolio has volatility. Where volatility results in a decline in value, this does not necessarily mean you will experience a permanent loss of capital. A permanent loss of capital can occur if the unit price of a Portfolio you have invested in does not recover, or if you choose to withdraw your investment following a period of loss. When considering an investment it is important to understand that the volatility of a Portfolio is not constant. None of the Portfolios are immune from a sudden increase in volatility. Portfolios that have historically exhibited a low level of volatility may experience a sudden increase in volatility. In addition, NZ Funds active investment management approach may increase or decrease the volatility of the Portfolios. and be aware that you risk a permanent loss of your investment. All investments, including the Portfolios, are exposed to risk. Risk is the possibility of loss of some or all of your investment. A Portfolio that has a higher possibility of loss is defined as higher risk. Conversely, a Portfolio that has a lower possibility of loss is defined as lower risk. Just because a Portfolio is described as lower risk does not mean that, should a loss occur, the size of that loss will be lower compared to a Portfolio that is described as higher risk. A Portfolio with a high possibility of loss is defined as higher risk because losses can be expected more frequently compared to a Portfolio described as lower risk. In addition, NZ Funds active investment management approach may increase, rather than decrease, the potential for a permanent loss of your investment. You are encouraged to discuss your time frames and attitude to volatility and risk with your Authorised Financial Adviser before making an investment. It is important to bear in mind that your attitude toward risk is used to determine the proportion of your investment portfolio that is invested in higher risk Portfolios not the presence or absence of higher risk securities within each of the Portfolios. For more on the risks associated with investing in the Portfolios, see What are my risks? on page

15 The Portfolios overview 12 core cash portfolio 14 core income portfolio 17 global income portfolio 20 core inflation portfolio 23 property inflation portfolio 26 equity inflation portfolio 29 core growth portfolio 32 global multi-asset growth portfolio 35 global equity growth portfolio 38 dividend and growth portfolio 41 capital opportunities portfolio 44

16 Overview Investment Category Portfolio Objective Risk & volatility characteristics Cash Core Cash Portfolio To provide a source of capital by primarily investing in income-orientated assets using an active investment management approach Low Income Core Income Portfolio Global Income Portfolio To provide exposure to income-orientated assets using an active investment management approach Medium Core Inflation Portfolio To mitigate the impact of inflation on your investment over the medium and/ or long-term by investing in incomeorientated assets and growth-orientated assets using an active investment management approach Medium Inflation Property Inflation Portfolio to High Equity Inflation Portfolio Core Growth Portfolio Global Multi-Asset Growth Portfolio Growth Global Equity Growth Portfolio To grow your investment over the longterm by investing in income-orientated assets and growth-orientated assets using an active investment management approach High Dividend and Growth Portfolio Capital Opportunities Portfolio Very High 1 This is based on the anticipated investment approach for each Portfolio as at the date of this Investment Statement. The anticipated investment approach may change over time. The assets listed do not represent the only assets that a Portfolio invests in, or may invest in. Each Portfolio has a wide investment mandate which means the Portfolios can invest in a wide range of assets. For further information on the assets that a Portfolio can invest in, see pages 14 to The Core Cash Portfolio is permitted to use derivatives but not leverage. 12

17 What assets do we primarily anticipate investing in over the economic cycle? 1 Recommended investment time frame Anticipated use of derivatives & leverage Primarily Cash and cash equivalents 1 month + Low 2 Primarily New Zealand and International fixed interest Primarily International fixed interest 2 years + Medium Primarily a diversified range of inflation-sensitive assets Primarily Listed property and property and/or infrastructure 5 years + Medium for related equities and fixed information interest only Primarily inflation-sensitive equities and fixed interest Primarily International equities with opportunistic allocations to other assets Primarily Commodities with high allocations to other assets Primarily International equities 10 years + High Primarily Australasian equities Opportunistically from the full range of asset classes nz funds managed portfolio service : : investment statement : : 27 november

18 Core Cash Portfolio Objective The objective of the Portfolio is to provide a source of capital by primarily investing in income-orientated assets using an active investment management approach. Investment category Cash Risk and volatility The Portfolio is likely to exhibit low risk and volatility characteristics. Recommended investment 1 month + time frame The Portfolio may invest in securities in the following asset classes: Permitted Cash and cash equivalents International fixed interest investments New Zealand fixed interest Foreign currency Anticipated investment approach Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Cash and cash equivalents (for example short-term money market securities issued by registered banks). From time to time the Portfolio may invest in New Zealand fixed interest (for example government bonds and/or short-term money market securities issued by corporations) and/or International fixed interest (for example government bonds and/or short-term money market securities issued by corporations). Redemption restriction The Portfolio has no redemption restrictions. 14

19 Core Cash Portfolio Additional important information While the Portfolio has a low risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives may be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. For more on derivatives and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

20 Core Cash Portfolio Historic asset allocation January 2014 Cash and cash equivalents 100 % Total 100 % January 2015 Cash and cash equivalents 100 % Total 100 % October 2015 Cash and cash equivalents 56 % New Zealand fixed interest 44 % Total 100 % The graphs above show the Portfolio s asset allocation over time. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 January 2015 October 2015 NZ Funds 100 % NZ Funds 100 % NZ Funds 100 % Total 100 % Total 100 % Total 100 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 16

21 Core Income Portfolio Objective The objective of the Portfolio is to provide exposure to income-orientated assets using an active investment management approach. Investment category Income Risk and volatility The Portfolio is likely to exhibit medium risk and volatility characteristics. Recommended for investment information 2 years + only time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Foreign currency Alternative securities Anticipated investment approach Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Cash and cash equivalents, and/or New Zealand fixed interest (for example government bonds and/ or corporate bonds) and/or International fixed interest (for example government bonds and/or corporate bonds and/or high yield debt securities). Redemption restriction The Portfolio has a 63-day notice period. nz funds managed portfolio service : : investment statement : : 27 november

22 Core Income Portfolio Additional important information While the Portfolio has a medium risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. The Portfolio may be leveraged. The maximum amount of leverage that may be used is up to two times the Portfolio s prevailing net asset value. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. 18

23 Core Income Portfolio Historic asset allocation January 2014 Cash and cash equivalents 25 % New Zealand fixed interest 36 % International fixed interest 37 % Foreign currency 3 % Total 101 % January 2015 Cash and cash equivalents 22 % New Zealand fixed interest 36 % International fixed interest 41 % Foreign currency 2 % Total 101 % October 2015 Cash and cash equivalents 13 % New Zealand fixed interest 33 % International fixed interest 54 % Foreign currency 1 % Total 101 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 96 % Invesco 5 % Total 101 % January 2015 NZ Funds 101 % Total 101 % October 2015 NZ Funds 101 % Total 101 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to nz funds managed portfolio service : : investment statement : : 27 november

24 Global Income Portfolio Objective The objective of the Portfolio is to provide exposure to income-orientated assets using an active investment management approach. Investment category Income Risk and volatility The Portfolio is likely to exhibit medium risk and volatility characteristics. Recommended investment 2 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Foreign currency Alternative securities Anticipated investment approach Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Cash and cash equivalents, and/or New Zealand fixed interest (for example government bonds and/ or corporate bonds) and/or International fixed interest (for example government bonds and/or corporate bonds and/or high yield debt securities). Redemption restriction The Portfolio has a 63-day notice period. 20

25 Global Income Portfolio Additional important information While the Portfolio has a medium risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. The Portfolio may be leveraged. The maximum amount of leverage that may be used is up to two times the Portfolio s prevailing net asset value. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

26 Global Income Portfolio Historic asset allocation January 2014 Cash and cash equivalents 31 % New Zealand fixed interest 36 % International fixed interest 33 % Foreign currency 10 % Total 110 % January 2015 Cash and cash equivalents 51 % New Zealand fixed interest 4 % International fixed interest 36 % Foreign currency 1 % Alternative Securities 8 % Total 100 % October 2015 Cash and cash equivalents 1 % New Zealand fixed interest 7 % International fixed interest 86 % Foreign currency 1 % Alternative Securities 9 % Total 104 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 77 % BlackRock Advisors 6 % Franklin Templeton Investments 8 % Nordea/Doubleline 8 % PIMCO 11 % Total 110 % January 2015 NZ Funds 61 % BlackRock Advisors 6 % Civic Capital Advisors 4 % Harness Investment 4 % Nordea/Doubleline 11 % Wellington Management 14 % Total 100 % October 2015 NZ Funds 35 % BlackRock Advisors 5 % Doubleline 9 % Harness Investment 9 % Semper Capital Management 9 % Wellington Management 37 % Total 104 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 22

27 Core Inflation Portfolio Objective The objective of the Portfolio is to mitigate the impact of inflation on your investment over the medium and/or long-term by investing in income-orientated assets and growthorientated assets using an active investment management approach. Investment category Inflation Risk and volatility The Portfolio is likely to exhibit medium to high risk and volatility characteristics. Recommended investment 5 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a diversified range of assets. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents, and/ or New Zealand fixed interest (for example inflation-linked bonds and/or corporate bonds) and/or International fixed interest (for example corporate bonds and/or high yield debt securities). Growth-orientated assets are expected to include Australasian equities and/or International equities and/or Commodities. Redemption restriction The Portfolio has a 63-day notice period. nz funds managed portfolio service : : investment statement : : 27 november

28 Core Inflation Portfolio Additional important information While the Portfolio has a medium to high risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. The Portfolio may be leveraged. The maximum amount of leverage that may be used is up to two times the Portfolio s prevailing net asset value. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. 24

29 Core Inflation Portfolio Historic asset allocation January 2014 Cash and cash equivalents 2 % New Zealand fixed interest 10 % International fixed interest 6 % Australasian equities 28 % International equities 25 % Listed property 7 % Foreign currency 13 % Commodities 2 % Alternative securities 16 % Total 109 % January 2015 Cash and cash equivalents 17 % New Zealand fixed interest 7 % International fixed interest 5 % Australasian equities 23 % International equities 24 % Listed property 8 % Foreign currency 12 % Commodities 5 % Alternative securities 9 % Total 110 % October 2015 Cash and cash equivalents 1 % New Zealand fixed interest 4 % International fixed interest 9 % Australasian equities 28 % International equities 45 % Listed property 10 % Foreign currency 25 % Commodities 11 % Alternative securities 13 % Total 146 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. for Historic underlying information investment managers only January 2014 NZ Funds 83 % Commodity Strategies Ltd 2 % FSF Management 1 % H.R.L. Morrison & Co 1 % ISAM 3 % Ospraie Management 11 % PIMCO 1 % Semper Capital Management 5 % Universa Investments 2 % Total 109 % January 2015 NZ Funds 95 % FSF Management 1 % ISAM 6 % Paulson & Co 1 % Semper Capital Management 5 % Universa Investments 2 % Total 110 % October 2015 NZ Funds 133 % Astenbeck Capital Managment 1 % Harness Investment 3 % ISAM 4 % Paulson & Co 4 % Universa Investments 1 % Total 146 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to nz funds managed portfolio service : : investment statement : : 27 november

30 Property Inflation Portfolio Objective The objective of the Portfolio is to mitigate the impact of inflation on your investment over the medium and/or long-term by investing in income-orientated assets and growthorientated assets using an active investment management approach. Investment category Inflation Risk and volatility The Portfolio is likely to exhibit medium to high risk and volatility characteristics. for Recommended information only investment 5 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to property and/or property related securities including infrastructure securities. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents and/or New Zealand fixed interest and/or International fixed interest (for example New Zealand and international corporate bonds which are property and/or infrastructure related). Growth-orientated assets are expected to include Australasian equities and/ or International equities and/or Listed property; which are property and/or infrastructure related. Redemption restriction The Portfolio has a 63-day notice period. 26

31 Property Inflation Portfolio Additional important information While the Portfolio has a medium to high risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. The Portfolio may be leveraged. The maximum amount of leverage that may be used is up to two times the Portfolio s prevailing net asset value. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

32 Property Inflation Portfolio Historic asset allocation January 2014 Cash and cash equivalents 15 % New Zealand fixed interest 2 % International fixed interest 15 % Australasian equities 15 % International equities 12 % Listed property 39 % Foreign currency 13 % Alternative securities 1 % Total 112 % January 2015 Cash and cash equivalents 6 % New Zealand fixed interest 11 % International fixed interest 7 % Australasian equities 12 % International equities 12 % Listed property 42 % Foreign currency 12 % Alternative securities 1 % Total 103 % October 2015 Cash and cash equivalents 4 % New Zealand fixed interest 10 % International fixed interest 5 % Australasian equities 12 % International equities 7 % Listed property 58 % Foreign currency 11 % Alternative securities 1 % Total 108 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 99 % AMP Haumi Management 3 % Goodman Group 3 % Nuveen/Wellington Mgmt 5 % Semper Capital Management 1 % Universa Investments 1 % Total 112 % January 2015 NZ Funds 100 % Semper Capital Management 2 % Universa Investments 1 % Total 103 % October 2015 NZ Funds 105 % PFIM 2 % Universa Investments 1 % Total 108 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 28

33 Equity Inflation Portfolio Objective The objective of the Portfolio is to mitigate the impact of inflation on your investment over the medium and/or long-term by investing in income-orientated assets and growthorientated assets using an active investment management approach. Investment category Inflation Risk and volatility The Portfolio is likely to exhibit medium to high risk and volatility characteristics. for Recommended information only investment 5 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Anticipated investment approach Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Australasian equities and/or International equities. Income-orientated assets are expected to include Cash and cash equivalents and/or New Zealand fixed interest (for example inflation-linked bonds and/or corporate bonds) and/or International fixed interest (for example high yield debt securities). Growth-orientated assets are expected to include Australasian equities and/or International equities. Redemption restriction The Portfolio has a 63-day notice period. nz funds managed portfolio service : : investment statement : : 27 november

34 Equity Inflation Portfolio Additional important information While the Portfolio has a medium to high risk profile, you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. The Portfolio may be leveraged. The maximum amount of leverage that may be used is up to two times the Portfolio s prevailing net asset value. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. 30

35 Equity Inflation Portfolio Historic asset allocation January 2014 Cash and cash equivalents 22 % New Zealand fixed interest 7 % International fixed interest 6 % Australasian equities 28 % International equities 35 % Foreign currency 8 % Alternative securities 1 % Total 107 % January 2015 Cash and cash equivalents 21 % New Zealand fixed interest 9 % Australasian equities 30 % International equities 33 % Foreign currency 9 % Alternative securities 6 % Total 108 % October 2015 Cash and cash equivalents 9 % New Zealand fixed interest 10 % Australasian equities 41 % International equities 29 % Foreign currency 4 % Alternative securities 10 % Total 103 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 98 % FSF Management 1 % H.R.L. Morrison & Co 1 % PIMCO 6 % Universa Investments 1 % Total 107 % January 2015 NZ Funds 101 % FSF Management 1 % Paulson & Co 5 % Universa Investments 1 % Total 108 % October 2015 NZ Funds 93 % Paulson & Co 9 % Universa Investments 1 % Total 103 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to nz funds managed portfolio service : : investment statement : : 27 november

36 Core Growth Portfolio Objective The objective of the Portfolio is to grow your investment over the long-term by investing in income-orientated assets and growth-orientated assets using an active investment management approach. Investment category Growth Risk and volatility The Portfolio is likely to exhibit high risk and volatility characteristics. for Recommended information only investment 10 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a diversified range of assets with a bias toward growth-orientated assets. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents and/ or New Zealand fixed interest (for example long-term government bonds) and/or International fixed interest (for example long-term government bonds and/or high yield debt securities). Growth-orientated assets are expected to include Australasian equities and/or International equities. It is also anticipated that for periods of time the Portfolio would hold a significant exposure to a range of other growth-orientated assets such as Foreign currency and/or Commodities and/or Alternative securities (for example hedge funds). Redemption restriction The Portfolio has a 63-day notice period. 32

37 Core Growth Portfolio Additional important information The Portfolio has a high risk profile, and you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. It is anticipated that the Portfolio will be leveraged. There is no maximum amount of leverage that may be used. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

38 Core Growth Portfolio Historic asset allocation January 2014 Cash and cash equivalents 1 % New Zealand fixed interest 1 % International fixed interest 30 % International equities 95 % Foreign currency 33 % Commodities 10 % Alternative securities 5 % Total 175 % January 2015 Cash and cash equivalents 1 % New Zealand fixed interest 1 % International equities 83 % Foreign currency 58 % Alternative securities 15 % Total 158 % October 2015 Cash and cash equivalents 1 % Australasian equities 14 % International equities 110 % Foreign currency 54 % Commodities 11 % Alternative securities 13 % Total 203 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 131 % ISAM 4 % Magellan Asset Management 19 % Tweedy, Browne 20 % Universa Investments 1 % Total 175 % January 2015 NZ Funds 91 % ISAM 14 % LSV Asset Management 17 % Magellan Asset Management 17 % Tweedy, Browne 18 % Universa Investments 1 % Total 158 % October 2015 NZ Funds 154 % ISAM 11 % LSV Asset Management 19 % Tweedy, Browne 17 % Universa Investments 2 % Total 203 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 34

39 Global Multi-Asset Growth Portfolio Objective The objective of the Portfolio is to grow your investment over the long-term by investing in income-orientated assets and growth-orientated assets using an active investment management approach. Investment category Growth Risk and volatility The Portfolio is likely to exhibit high risk and volatility characteristics. Recommended investment 10 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a diversified range of assets. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents, and/ or New Zealand fixed interest (for example long-term government bonds) and/or International fixed interest (for example long-term government bonds and/or high yield debt securities). Growth-orientated assets are expected to include Commodities (for example securities exposed to energy, agriculture, precious metals and/or industrial metals) and/or Alternative securities (for example hedge funds). Redemption restriction The Portfolio has a 63-day notice period. nz funds managed portfolio service : : investment statement : : 27 november

40 Global Multi-Asset Growth Portfolio Additional important information The Portfolio has a high risk profile, and you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. It is anticipated that the Portfolio will be leveraged. There is no maximum amount of leverage that may be used. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. 36

41 Global Multi-Asset Growth Portfolio Historic asset allocation January 2014 Cash and cash equivalents 1 % International fixed interest 38 % Foreign currency 10 % Commodities 34 % Alternative securities 19 % Total 102 % January 2015 Cash and cash equivalents 1 % International fixed interest 13 % International equities 10 % Foreign currency 22 % Commodities 70 % Alternative securities 24 % Total 140 % October 2015 Cash and cash equivalents 1 % New Zealand fixed interest 4 % International fixed interest 18 % International equities 12 % Foreign currency 26 % Commodities 45 % Alternative securities 35 % Total 141 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 34 % Civic Capital Advisors 7 % Commodity Strategies Ltd 10 % ISAM 4 % Nuveen/Wellington Mgmt 10 % Ospraie Management 9 % PIMCO 19 % Semper Capital Management 9 % Total 102 % January 2015 NZ Funds 103 % ISAM 18 % Paulson & Co 5 % Semper Capital Management 13 % Universa Investments 1 % Total 140 % October 2015 NZ Funds 106 % Astenbeck Capital Management 10 % Brevan Howard 1 % H2O Asset Management 13 % ISAM 9 % Universa Investments 2 % Total 141 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to nz funds managed portfolio service : : investment statement : : 27 november

42 Global Equity Growth Portfolio Objective The objective of the Portfolio is to grow your investment over the long-term by investing in income-orientated assets and growth-orientated assets using an active investment management approach. Investment category Growth Risk and volatility The Portfolio is likely to exhibit high risk and volatility characteristics. Recommended investment 10 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Australasian equities and/or International equities. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents and/ or New Zealand fixed interest (for example long-term government bonds) and/or International fixed interest (for example long-term government bonds and/or high yield debt securities). Growth-orientated assets are expected to include Australasian equities and/or International equities and/or Foreign currency and/or Alternative securities (for example hedge funds). Redemption restriction The Portfolio has a 63-day notice period. 38

43 Global Equity Growth Portfolio Additional important information The Portfolio has a high risk profile, and you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. It is anticipated that the Portfolio will be leveraged. There is no maximum amount of leverage that may be used. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

44 Global Equity Growth Portfolio Historic asset allocation January 2014 Cash and cash equivalents 1 % New Zealand fixed interest 1 % Australasian equities 10 % International equities 81 % Foreign currency 28 % Alternative securities 5 % Total 126 % January 2015 Cash and cash equivalents 1 % New Zealand fixed interest 3 % Australasian equities 11 % International equities 61 % Foreign currency 40 % Alternative securities 34 % Total 150 % October 2015 Cash and cash equivalents 1 % New Zealand fixed interest 1 % Australasian equities 8 % International equities 126 % Foreign currency 39 % Alternative securities 24 % Total 199 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 75 % H.R.L. Morrison & Co 1 % ISAM 4 % Magellan Asset Management 10 % Odey Asset Management 15 % TT International 10 % Tweedy, Browne 10 % Universa Investments 1 % Total 126 % January 2015 NZ Funds 72 % ISAM 12 % LSV Asset Management 12 % Magellan Asset Management 11 % Odey Asset Management 15 % Suvretta Capital Management 6 % TT International 10 % Tweedy, Browne 11 % Universa Investments 1 % Total 150 % October 2015 NZ Funds 129 % Devon Funds Management 7 % ISAM 9 % LSV Asset Management 14 % Odey Asset Management 8 % Suvretta Capital Management 6 % TT International 11 % Tweedy, Browne 13 % Universa Investments 2 % Total 199 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 40

45 Dividend and Growth Portfolio Objective The objective of the Portfolio is to grow your investment over the long-term by investing in income-orientated assets and growth-orientated assets using an active investment management approach. Investment category Growth Risk and volatility The Portfolio is likely to exhibit high risk and volatility characteristics. for Recommended information only investment 10 years + time frame Permitted investments The Portfolio may invest in securities in the following asset classes: Cash and cash equivalents International equities New Zealand fixed interest Listed property International fixed interest Foreign currency Australasian equities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated that the Portfolio would hold a significant exposure to Australasian equities. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents and/or New Zealand fixed interest (for example long-term government bonds and/or corporate bonds) and/or International fixed interest (for example long-term government bonds and/or corporate bonds). Growth-orientated assets are expected to include Australasian equities and/or Listed property. It is also anticipated that for periods of time the Portfolio would hold an exposure to other growth-orientated assets such as International equities and/or Foreign currency. Redemption restriction The Portfolio has a 63-day notice period. nz funds managed portfolio service : : investment statement : : 27 november

46 Dividend and Growth Portfolio Additional important information The Portfolio has a high risk profile, and you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. It is anticipated that the Portfolio will be leveraged. There is no maximum amount of leverage that may be used. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. 42

47 Dividend and Growth Portfolio Historic asset allocation January 2014 Cash and cash equivalents 11 % Australasian equities 80 % International equities 8 % Foreign currency 14 % Total 113 % January 2015 Cash and cash equivalents 1 % New Zealand fixed interest 15 % Australasian equities 82 % International equities 8 % Foreign currency 10 % Total 116 % October 2015 Cash and cash equivalents 1 % Australasian equities 93 % International equities 8 % Foreign currency 16 % Total 118 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 108 % H.R.L. Morrison & Co 5 % Total 113 % January 2015 NZ Funds 116 % Total 116 % October 2015 NZ Funds 118 % Total 118 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to nz funds managed portfolio service : : investment statement : : 27 november

48 Capital Opportunities Portfolio Objective The objective of the Portfolio is to grow your investment over the long-term by investing in income-orientated assets and growth-orientated assets using an active investment management approach. Investment category Growth Risk and volatility The Portfolio is likely to exhibit very high risk and volatility characteristics. Recommended investment 10 years + time frame The Portfolio may invest in securities in the following asset classes: Permitted investments Cash and cash equivalents New Zealand fixed interest International fixed interest Australasian equities International equities Listed property Foreign currency Commodities Alternative securities Over the course of an economic cycle, which may last between three and seven years (or longer), it is anticipated the Portfolio would hold securities across different parts of the capital structure (for example corporate bonds and/or perpetual securities and/or equities). The Portfolio may hold concentrated positions and may not always be diversified. Anticipated investment approach Income-orientated assets are expected to include Cash and cash equivalents and/or New Zealand fixed interest (for example long-term government bonds and/or mortgagebacked securities and/or high yield debt securities) and/or International fixed interest (for example long-term government bonds and/or mortgage-backed securities and/or high yield debt securities). Growth-orientated assets are expected to include Australasian equities and/or International equities and/or Foreign currency and/or Alternative securities (for example hedge funds). Redemption restriction The Portfolio has a 91-day notice period and redemptions and switches are only permitted to occur on certain dates. You should be aware this means that you may have to wait approximately 190 days before your redemption request is processed. 44

49 Capital Opportunities Portfolio Additional important information The Portfolio has a very high risk profile, and you should be aware of the following: NZ Funds uses an active investment management approach. This approach, combined with the ability to invest widely, is a unique feature of NZ Funds investment approach. Active investment management may be considered higher risk than non-active investment management. The Portfolio can invest in permitted asset classes and securities in any proportion. This means that the Portfolio may hold concentrated positions and may not always be diversified. Holding concentrated positions can be a high risk investment technique. The Portfolio may invest in each asset class directly or indirectly through derivatives or collective investment vehicles. Derivatives, collective investment vehicles and short positions can be used to increase or decrease an allocation to an asset class, for hedging exposures or for seeking to enhance returns. It is anticipated that derivatives would be used for risk management purposes and to seek to enhance returns. The use of derivatives and short positions can be high risk investment techniques. It is anticipated that the Portfolio will be leveraged. There is no maximum amount of leverage that may be used. The use of leverage may increase positive or negative returns. The use of leverage can be a high risk investment technique. For more on derivatives and leverage and NZ Funds investment management approach, see pages 8 and 9. Historic monthly investment returns The graph above shows the performance of the Portfolio (after fees and expenses but before PIE tax) over time. This may help illustrate the volatility of the Portfolio. Past performance is not indicative of future performance. Further, there is no promise or guarantee made by any person as to the performance of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

50 Capital Opportunities Portfolio Historic asset allocation January 2014 Cash and cash equivalents 30 % International fixed interest 29 % Australasian equities 16 % International equities 8 % Listed property 14 % Foreign currency 4 % Total 101 % January 2015 Cash and cash equivalents 12 % Australasian equities 6 % International equities 22 % Listed property 17 % Foreign currency 48 % Alternative securities 3 % Total 108 % October 2015 Cash and cash equivalents 21 % Australasian equities 9 % International equities 40 % Listed property 15 % Foreign currency 43 % Commodities 2 % Alternative securities 7 % Total 137 % The graphs above show the Portfolio s asset allocation over time. They take into account the effect of leverage. As a result, the total allocation may be greater than 100%. The graphs may not show material differences in asset allocation. However, it is important to note that the Portfolio s asset allocation is expected to change in the future and that changes may be material. Historic underlying investment managers January 2014 NZ Funds 100 % Dorchester Pacific 1 % Total 101 % January 2015 NZ Funds 105 % Dorchester Pacific 1 % Universa Investments 2 % Total 108 % October 2015 NZ Funds 130 % Universa Investments 7 % Total 137 % The graphs above show the Portfolio s underlying investment managers over time. In addition to managing part of the Portfolio s assets, NZ Funds may select external underlying investment managers where we consider their investment approach will help meet the objective of the Portfolio. The external underlying investment managers used are expected to change over time as part of our active investment management approach. For more on the Portfolio, go to 46

51 section 2 Details of the NZ Funds Managed Portfolio Service what sort of investment is this? 48 who is involved in providing it for me? 48 how much do i pay? 49 what are the charges? 50 what returns will i get? 53 what are my risks? 54 can the investment be altered? 56 how do i cash in my investment? 57 who do i contact with inquiries about my investment? 59 is there anyone to whom i can complain if i have problems with the investment? 59 what other information can i obtain about this investment? 60 how do i apply? 60 glossary 62

52 What sort of investment is this? Who is involved in providing it for me? Portfolios This Investment Statement contains an offer of units in the Portfolios listed below. The Portfolios are New Zealand unit trusts that have elected PIE tax status: Core Cash Portfolio; Core Income Portfolio; Global Income Portfolio; Core Inflation Portfolio; Property Inflation Portfolio; Equity Inflation Portfolio; Core Growth Portfolio; Global Multi-Asset Growth Portfolio; Global Equity Growth Portfolio; Dividend and Growth Portfolio; and Capital Opportunities Portfolio. For more information about the offer and each Portfolio, see the relevant Prospectus. for Collective investments information only The NZ Funds Managed Portfolio Service Portfolios are collective The Directors of NZ Funds and/or their details may change investment vehicles. The money you invest into a Portfolio is from time to time. You may contact NZ Funds combined with other investors money to purchase assets. A collective investment means your Portfolio holding represents a proportionate holding in the underlying assets of the Portfolio. This is not the same as direct ownership of the underlying assets. You will be allocated units in the Portfolio(s). The units represent your proportionate holding in the Portfolio(s). The number of units you are allocated is based on the price per unit, called the unit price. The performance of your investment will be measured by the rise or fall of the unit price. As the combined value of the assets purchased by the Portfolio(s) increases or decreases, so too will the unit price. The scope of the permitted investments under the terms of the relevant Trust Deed and Prospectus is wide as it is necessary to enable NZ Funds to invest appropriately across the Portfolios which cover materially different mandates and objectives. NZ Funds invests in accordance with the objective and risk profile for each Portfolio. NZ Funds has internal processes in place designed to ensure that each of the Portfolios is invested in accordance with its objective and risk profile. Each Portfolio may invest in the asset classes set out on pages 14 to 46 by investing directly, or indirectly via Wholesale Trusts. As at the date of this Investment Statement, the Portfolios only invest in Wholesale Trusts (with the exception of Cash and cash equivalents and derivatives). The Portfolios may invest directly in other asset classes or assets without notice to investors. Manager NZ Funds is the manager (Manager) and issuer of each Portfolio. As Manager, NZ Funds is principally responsible for the day-to-day management and administration of each Portfolio, including the implementation of investment strategies, the promotion of each Portfolio, and maintaining the register of unit holders. NZ Funds has been an investment manager since NZ Funds senior management are significant indirect shareholders in the company. This means that they are shareholders of the company that owns NZ Funds. Many of our senior management team have been with the firm for a decade or more and bring significant tenure and experience to their roles. As at the date of this Investment Statement, the Directors of NZ Funds are Philip Doak, Richard James, Michael Lang, Glenn Wright and Gregory Horton, all of Auckland. The Directors can be contacted at NZ Funds address: New Zealand Funds Management Limited Level 16, Zurich House 21 Queen Street Auckland or [email protected] to check NZ Funds current Directors and their details. For more on the Directors, see page 7 of this Investment Statement or the relevant Prospectus or go to Trustee The New Zealand Guardian Trust Company Limited is the trustee (Trustee) of the Portfolios. The Trustee is responsible for holding the assets of the Portfolios and for supervising NZ Funds. The Trustee s address is: The New Zealand Guardian Trust Company Limited Level Queen Street Auckland 1010 The Trustee has been granted a licence by the Financial Markets Authority under section 16(1) of the Financial Markets Supervisors Act 2011 to act as a trustee for a term expiring on 16 March To view the licence granted to the Trustee, including the conditions on the licence, go to 48

53 Auditors Ernst & Young are the auditors of the Portfolios. The auditors are registered under the Auditor Regulation Act The auditors address is: Ernst & Young EY Building 2 Takutai Square Britomart Auckland 1010 Solicitors Russell McVeagh are the solicitors to the Portfolios. Their address is: Russell McVeagh Vero Centre 48 Shortland Street Auckland 1140 Subscription amounts There is no minimum subscription amount for an investment in a Portfolio. You are free to choose when to invest and how much to invest, provided your investment meets the requirements set out in this Investment Statement. An investment can be made by lump-sum, and/or regular contributions. There is no obligation for you to make any ongoing regular contributions once you have made your initial investment. You may wish to add to your investment by making further lump-sum contributions. lump-sum contributions You can invest in a Portfolio by way of a lump-sum contribution. You will need to complete the Application Form and send it along with a cheque to NZ Funds. Information about who the cheque should be made out to and the address the cheque should be sent to is set out in the form. Changes to this information The Trustee, the Manager, auditors and solicitors and/or their details may change. Current information is available by contacting NZ Funds on or [email protected]. Underlying investment managers regular contributions for The Portfolios may invest information directly, indirectly via Wholesale Regular contributions cannot be made only to the Capital Trusts. As at the date of this Investment Statement, the Opportunities Portfolio. Portfolios only invest Wholesale Trusts (with the exception of Cash and cash equivalents and derivatives). The investments For all other Portfolios, you can choose to make regular in the Wholesale Trusts are managed by NZ Funds and external contributions by direct debit, on a weekly, fortnightly, monthly underlying investment managers selected by NZ Funds. Different external underlying investment managers are selected where NZ Funds considers their investment approach will help meet the objectives of the Portfolios. The external underlying investment managers are monitored and reviewed and are expected to change over time as part of our active investment management approach. For more on the external underlying investment managers, see pages 14 to 46 and How much do I pay? Application Form and AML Forms To subscribe for units in a Portfolio, you must complete the Application Form and relevant AML Form(s) attached to this Investment Statement. You will need to send your Application Form and AML Forms to NZ Funds at the address set out on the Application Form. For more on how to invest, see How do I apply? on page 60. Once the Application Form is accepted, NZ Funds will pass all subscription monies through to the relevant Portfolio bank account held by the Trustee. Contributions should be made in New Zealand dollars. Contributions in foreign currency will not be accepted unless NZ Funds agrees. or quarterly basis, or as otherwise accepted by NZ Funds. Regular contributions are paid directly to the NZ Funds Managed Portfolio Service bank account and then passed through to the relevant Portfolio s bank account. To make regular contributions by direct debit, you will need to complete a Direct Debit Form attached to this Investment Statement and return this with the Application Form. NZ Funds in its sole discretion may accept alternative methods for regular contributions. You can discontinue additional regular contributions at any time by giving written notice of the cancellation to NZ Funds. Issue of units The number of units issued will depend on the issue price for units of the relevant Portfolio. The issue price is essentially the net asset value of the Portfolio, plus an amount being NZ Funds estimate of the costs of acquiring the assets of that Portfolio, divided by the number of units on issue in the Portfolio. For more on the calculation of the issue price, see the relevant Prospectus. maximum holding restriction The combined holdings of an investor and/or their associated persons must not exceed the maximum number of units set by NZ Funds from time to time. nz funds managed portfolio service : : investment statement : : 27 november

54 The maximum number of units is set for the purpose of ensuring a Portfolio meets the PIE rules. If NZ Funds forms the view that the combined holding does (or could) put the PIE tax status of the Portfolio at risk, it may redeem from you or your associated person(s) any number of units it determines necessary. For more on the maximum holding restriction, including NZ Fund s ability to request information and remove investors from a Portfolio, see the relevant Prospectus. acceptance of application NZ Funds can accept or reject applications for subscription at its own discretion. No reasons are required to be given if any application is rejected. NZ Funds can also defer accepting any application request by up to two business days. For more information, including NZ Funds discretion to suspend accepting new applications, see the relevant Prospectus. What are the charges? This section sets out the types of fees and expenses that are, or may be, payable as a result of investing in a Portfolio. for Investor fees information only entry, exit and switching fees example of target base fee across total investment Entry, exit and switching fees are not currently charged on any Investment Weighted investment in a Portfolio. However, NZ Funds can introduce these fees without prior notice to investors. Your Authorised Financial Adviser may charge an implementation fee or exit fee for their services in implementing your investment portfolio or implementing withdrawals from your investment portfolio. For more information, see Authorised Financial Adviser Fees on page 52. Portfolio fees This section sets out the various fees and expenses that apply to each Portfolio. These fees and expenses are paid directly or indirectly out of the assets of the Portfolio. This means that as an investor in a Portfolio, your return is affected by these fees and expenses. The two primary components are discussed below, being the target base fee and the NZ Funds performance fee. NZ Funds has set a target base fee for each Portfolio. The target base fee is a not a separate fee, but a means of providing an indication of the level of fees and expenses that each Portfolio is expected to incur (excluding transaction costs, extraordinary fees and expenses, and performance fees charged by NZ Funds and external underlying investment managers). In certain circumstances NZ Funds or its associated entities may, in their absolute discretion and from their own funds, reduce, pay, contribute to or rebate some of the Portfolios fees and expenses. what is the target base fee? The target base fee for a Portfolio is an estimate of certain fees and expenses paid directly or indirectly out of the assets of that Portfolio as a proportion of the gross asset value of the Portfolio. Because it is an estimate, the target base fee is not guaranteed for the current financial year or any future period. It is important to note that the target base fee for a Portfolio does not include: transaction costs associated with buying and selling the assets of a Portfolio (for example, brokerage commissions and buy/sell spreads); extraordinary fees and expenses (for example, fees and expenses associated with any investor meetings or significant regulatory change). There is no limit on these fees and expenses; and performance fees charged by NZ Funds and external underlying investment managers. The target base fee for each Portfolio is set out in the table on page 51. An investor who has allocated their investment portfolio across one or more Portfolios in each of the different investment categories will typically have a lower target base fee across their total investment than the maximum target base fee stated in the table on page 51. Below is an example of the target base fee that an investor would incur if their investment portfolio was allocated across each of the investment categories in the proportions shown. Investment Portfolios Category Category Allocation Target Base Fee Cash Core Cash 10% 0.04% Income Core Income Global Income 20% 0.31% Inflation Core Inflation Property Inflation Equity Inflation 30% 0.85% Growth Core Growth Global Multi-Asset Growth Global Equity Growth Dividend and Growth Capital Opportunities 40% 1.20% Target Base Fee Across Total Investment 2.40% The above example is presented for illustrative purposes only and does not represent the investment portfolio allocations or target base fee incurred by any particular investor. Investors are encouraged to work with their Authorised Financial Adviser to develop a financial plan and corresponding investment portfolio specific to their goals, investing time frame and attitude towards risk. 50

55 what fees and expenses are included in the target base fee? The fees and expenses that make up the target base fee are set out below. These fee and expense components are accrued and are reflected in the daily unit price of each Portfolio. At least once a quarter, the target base fee is compared to the actual fees and expenses and any necessary adjustments are made. This ensures that as much as possible all investors bear their fair share of the fees and expenses making up the target base fee. trustee fee Each Portfolio pays a trustee fee to the Trustee based on a percentage of the gross asset value of each Portfolio. The Portfolio s trustee fee is up to 0.04% per annum, and is subject to a minimum fee of $30,000 per annum across all Portfolios. The Trustee may, with the agreement of NZ Funds, alter the rate and basis of the calculation of the trustee fee at any time. portfolio management fee Each Portfolio pays a portfolio management fee to NZ Funds based on a percentage of the gross asset value of each Portfolio. The portfolio management fee for each Portfolio is set out in the table below. Expense reimbursement The Trust Deed allows the Trustee, NZ Funds and any other parties that may be appointed by the Trustee or NZ Funds to be reimbursed for all expenses properly incurred by them while carrying out their duties in relation to a Portfolio. This expense reimbursement is paid out of the assets of the relevant Portfolio. Details of the actual expense reimbursement incurred by a Portfolio can be found in the annual financial statements. Where expenses are attributable to more than one Portfolio, NZ Funds will, in its discretion, apportion these expenses across all the Portfolios in an equitable manner. Professional fees The Portfolios may incur professional fees such as fees for legal, accounting and audit services. The Trust Deed allows these professional fees to be paid out of the assets of the relevant Portfolio. Details of the actual professional fees incurred by a Portfolio can be found in the annual financial statements. Where professional fees are attributable to more than one Portfolio, NZ Funds will, in its discretion, apportion these professional fees across all the Portfolios in an equitable manner. Underlying funds fees and expenses NZ Funds may alter the rate and basis of the calculation of the portfolio management fee at any time. If the portfolio The Portfolios currently invest in Wholesale Trusts that incur management fee increases, NZ Funds will provide one month s fees and expenses. Some or all of these fees and expenses notice to all investors in the relevant Portfolio. may be paid to NZ Funds and/or to entities that are associated with NZ Funds. other fees and expenses The Portfolios and Wholesale Trusts may also invest in other Other fees and expenses are made up of expense funds managed by entities not associated with NZ Funds reimbursement, professional fees and underlying funds fees and (external underlying funds) which may charge fees including entry fees, exit fees, performance fees and management fees, and incur expenses. expenses (excluding performance fees charged by NZ Funds and external underlying investment managers). The target other fees and expenses for each Portfolio is set out in the table below. To the extent that the actual other fees and expenses of a Portfolio exceed the target, NZ Funds or its associated entities may in their absolute discretion and from their own funds, reduce, pay, contribute to or rebate some of these other fees and expenses. The returns of a Portfolio in which you are invested will be indirectly affected by the fees and expenses charged or incurred by the Wholesale Trusts and external underlying funds. summary of fees and expenses that make up target base fee Portfolio Trustee fee (p.a.) Portfolio management fee (p.a.) Other fees and expenses (p.a.) Target base fee (p.a.) Core Cash Portfolio 0.04% 0.15% 0.21% 0.40% Core Income Portfolio 0.04% 0.80% 0.71% 1.55% Global Income Portfolio 0.04% 0.80% 0.71% 1.55% Core Inflation Portfolio 0.04% 1.75% 1.06% 2.85% Property Inflation Portfolio 0.04% 1.75% 1.06% 2.85% Equity Inflation Portfolio 0.04% 1.75% 1.06% 2.85% Core Growth Portfolio 0.04% 1.75% 1.20% 2.99% Global Multi-Asset Growth Portfolio 0.04% 1.75% 1.20% 2.99% Global Equity Growth Portfolio 0.04% 1.75% 1.20% 2.99% Dividend and Growth Portfolio 0.04% 1.75% 1.20% 2.99% Capital Opportunities Portfolio 0.04% 1.75% 1.20% 2.99% This table shows the target base fee and its respective components as at the date of this Investment Statement (after any contributions or rebates by NZ Funds). The above numbers are expressed as a percentage of the gross asset value of the Portfolio. nz funds managed portfolio service : : investment statement : : 27 november

56 The amount of fees and expenses incurred by external underlying funds is obtained from external managers, administrators and market data providers. For certain external underlying funds, estimates of these amounts may have been used in determining the target other fees and expenses. nz funds performance fee Some Portfolios may be charged a performance fee by NZ Funds. The performance fee is equivalent to 10% of the returns of a Portfolio in a financial year (Performance Year) that exceed the current performance target (Performance Target) of 8%. The following Portfolios may be charged a performance fee by NZ Funds: Core Growth Portfolio; Global Multi-Asset Growth Portfolio; Global Equity Growth Portfolio; Dividend and Growth Portfolio; and Capital Opportunities Portfolio. Changes to fees NZ Funds is entitled in its discretion to introduce any other fees to be charged to a Portfolio or to investors in a Portfolio by providing one month s notice to affected investors. GST All fees are stated exclusive of GST or other similar tax. This means that if any GST, or other similar tax is payable on any fee, that tax will be payable in addition to the amount of the fee. Indemnification The Trustee and NZ Funds are indemnified out of the relevant Portfolio s assets for any loss or liability suffered where they have acted properly, in accordance with the relevant Trust Deed and the terms of the offer. This indemnification would extend to the timely payment of fees and of properly incurred expenses, as allowed under the relevant Trust Deed. charging the performance fee Authorised Financial Advisers The performance fee (if any) is calculated daily and reflected in the daily unit price of the Portfolio. It is based on the authorised financial adviser fees returns calculated on the total gross assets of the Portfolio. Your Authorised Financial Adviser may charge fees for NZ Funds may alter the rate and basis of the calculation of the financial advisory services or other services they provide, and/ performance fee, including changing the Performance Target, or implementation fees for implementing your investment at any time by providing one month s notice to all investors in portfolio and/or exit fees for implementing any withdrawals the relevant Portfolio. from your investment portfolio. rebating the performance fee Any fees relating to financial advisory services, or other If in the financial year following a Performance Year (Rebate Year), services provided, should be agreed between you and your a Portfolio s returns are less than 8% (Rebate Target), NZ Funds Authorised Financial Adviser before an investment is made. will rebate back to that Portfolio some or all of any performance Details of these fees are required to be outlined in their fee charged to the Portfolio in the Performance Year. disclosure statement, and are paid by you to your Authorised The amount of the rebate (if any) is equivalent to 10% of the Financial Adviser, and may, if you authorise it, be deducted from returns of the Portfolio in the Rebate Year that are less than the your investment portfolio. NZ Funds, or an entity associated Rebate Target, but will not be more than the performance fee paid with NZ Funds, may charge a fee for financial advisory services (if any) by the Portfolio in the Performance Year. provided by one of their Authorised Financial Advisers. Any rebate is calculated daily and reflected in the daily unit price of the Portfolio. It is based on the returns calculated on the total gross assets of the Portfolio. NZ Funds may alter the Rebate Target at any time by providing one month s notice to all investors in the relevant Portfolio. payment of the performance fee The amount of the performance fee (if any) due by a Portfolio is paid quarterly. All performance fee amounts are paid to the Trustee who holds these amounts on trust until the end of the Rebate Year. Where the amount paid by a Portfolio for previous quarters exceeds the amount due at the end of a quarter, the excess amount is refunded to the Portfolio by the Trustee. administration payment NZ Funds may also pay your Authorised Financial Adviser (if applicable) an administration payment to assist the Authorised Financial Adviser with the costs associated with providing financial advice. NZ Funds is not entitled to be reimbursed from the Portfolios for any administration payment and therefore any administration payment will not be an additional cost to the Portfolios or to you as an investor in those Portfolios. At the end of the Rebate Year, the performance fee amount is subject to independent auditor verification before the Trustee pays any performance fee amount to NZ Funds. 52

57 What returns will I get? No rate of return, or repayment of your investment, is promised or guaranteed by the Trustee, NZ Funds or any other person on any amount invested in any Portfolio. Please also note that past performance is not indicative of future performance. The returns of a Portfolio are reflected in the change of the unit price of the Portfolio over given periods of time. The unit price reflects the value of assets in the Portfolio, the income those assets earn and the expenses incurred by the Portfolio. The Trustee is responsible for paying distributions from the relevant Portfolio. The Trustee acts at the direction of NZ Funds, subject to its obligations under the Unit Trusts Act 1960 and the relevant Trust Deed. At the date of this Investment Statement, NZ Funds does not intend to distribute income and gains in respect of any Portfolio. Instead, income and gains (if any) are retained in the relevant Portfolio and therefore become part of your investment. NZ Funds may determine in the future to make distributions from the Portfolios. Further information on distributions, including electing to reinvest any distributions (if any), is available in the relevant Prospectus. Your returns may also be affected by the size of a Portfolio. If a Portfolio becomes too large, NZ Funds ability to implement its active investment management approach may be affected. If a Portfolio becomes too small the ability to access certain investments may be limited and fixed fees and charges may have a greater impact on returns. Your returns may also be affected by your allocation between the Portfolios as it is generally intended that an investor will allocate their investment across all or a majority of the Portfolios within each investment category rather than investing in a single Portfolio or single investment category. In addition to the above, the timing of your actions, including when and how you contribute to, and when and how you withdraw from, the Portfolio may also affect your returns. Tax For information on the risks associated with investing in the Portfolios, see What are my risks? on page 54. The tax treatment of investing in a Portfolio will vary from person to person. You are encouraged to consult with your Authorised Financial Adviser before making an investment. Neither the Trustee, NZ Funds nor any associated parties can take any responsibility for your particular tax position as a result of an investment in a Portfolio. As no distributions are currently intended, you can only access portfolio investment entities your investment by redeeming. information Each Portfolio has elected to be a Portfolio only Investment Entity For information about redeeming from a Portfolio, see (PIE) under the PIE rules. The PIE rules allow you to effectively How do I cash in my investment? on page 57. pay tax on your investment the Portfolio at a maximum tax rate of 28%. The Portfolio s tax liability is based the PIE tax rates provided to it by its investors. Key factors affecting returns Some of the key factors which can affect returns include: Investment performance; Fees and expenses; Portfolio size; Allocation of your investment between the Portfolios; The timing of contributions and/or withdrawals made by you; and Tax. The performance of the investment markets and the underlying assets can be influenced by many factors, including economic, political and other international events, including for example, acts of terrorism or natural disasters. Neither NZ Funds nor any external underlying investment manager can control or guarantee the performance of investment markets and underlying assets. Returns are also affected by implementation of NZ Funds active investment management approach, and the actions and choices of external underlying investment managers that NZ Funds has selected. The amount of any fees or expenses paid by a Portfolio will also affect returns. This is because fees and expenses are paid out of the assets of the Portfolio. what is my pie tax rate? The PIE tax rates are either 0%, 10.5%, 17.5% or 28%. Where no election is made, the default rate of 28% will apply. For help in selecting the appropriate PIE tax rate for you, see Selecting the right PIE tax rate on page 60, or contact your Authorised Financial Adviser. altering your pie tax rate You can change your PIE tax rate at any time. For information on how to change your PIE tax rate, see Change of PIE tax rate on page 60. In certain circumstances, your PIE tax rate for the relevant quarter will be changed to 0% (we call this a zero-rated investor). This could happen if you redeem completely from a Portfolio; you have insufficient holdings to meet your PIE tax liability; or you are a trust or a company investor for which the default rate of 28% applies. In certain circumstances, you may be required to file a tax return and pay tax at your marginal tax rate, which could be as high as 33%. If you have redeemed completely from a Portfolio and a PIE tax rate has been applied, NZ Funds will provide you with a statement containing the relevant PIE tax information shortly after the end of the relevant quarter. nz funds managed portfolio service : : investment statement : : 27 november

58 additional tax information NZ Funds will provide you, or your Authorised Financial Adviser, with an annual tax statement containing the relevant PIE tax information before 30 June each year. For more on the tax considerations detailed above, see the relevant Prospectus. Suspension of redemptions Your returns may also be affected by NZ Funds ability to suspend redemptions. NZ Funds is entitled to suspend redemptions if NZ Funds forms the opinion that it is not practicable, or would be materially prejudicial to the interests of investors in the relevant Portfolio, to permit redemptions from that Portfolio due to: Market disruption or closure; Financial, political or economic conditions in respect of any financial market; The nature of a particular asset of the Portfolio; or The occurrence or existence of any other circumstance or event. NZ Funds will endeavour to promptly notify affected investors in the event redemptions from a Portfolio are suspended. For more on the suspension of redemptions, see the relevant Prospectus. for What are information my risks? only For more on NZ Funds active investment management approach, see page 8. Every investment has risk. Risk is the possibility of loss of some or all of your investment. No rate of return, or repayment of your investment, is promised or guaranteed by the Trustee, NZ Funds or any other person. Please also note that past performance is not indicative of future performance. The amount of risk which you are comfortable with may vary depending on your attitude to risk and personal circumstances, including your age which is a determinant of your investment time frame. You will need to consider the risks of investing in the Portfolios discussed below before investing. You are also encouraged to discuss your attitude to risk and personal circumstances with an Authorised Financial Adviser before investing. If you are uncomfortable with any of the risks outlined in this section, or anything in this Investment Statement or the relevant Prospectus, please do not invest. Primary risks Some of the primary risks of investing in a Portfolio include: Not getting back some (or all) of your money; Not getting the returns you expected; Not being able to leave a Portfolio when you want to; and Experiencing periods where your investment is worth less than it had been previously. Key factors affecting risks Some of the key factors affecting the primary risks of investing in a Portfolio include: market risk Market risk is the risk of volatility or loss caused by a change in the value of the investments held by a Portfolio. Market risk arises from uncertainty about the future value of investments held by a Portfolio. These changes may be caused by factors specific to an investment, or as a result of factors affecting financial markets generally. illiquid securities The Portfolios may hold illiquid securities. Illiquid securities are assets that cannot quickly be converted or exchanged for cash (or not without a significant loss in value). Illiquid securities generally carry a greater risk than liquid securities, particularly during times of market turmoil. Investment illiquidity may make it difficult to acquire or dispose of assets. nz funds active investment management approach NZ Funds uses an active investment management approach. An active investment management approach is subject to different risks (which may be considered higher risks) than a non-active investment approach. As a result, NZ Funds active investment management approach may cause the returns and capital stability of the Portfolios to significantly differ from the returns and capital stability of the underlying asset classes utilised, and/or any benchmark index. wide investment mandates The Portfolios Trust Deeds enable NZ Funds to invest in a wide range of assets and to change assets quickly and without notice to investors. NZ Funds has developed internal investment guidelines which assist in the oversight of each Portfolio. These guidelines are designed to ensure that each Portfolio invests in accordance with its investment objective and risk profile. Due to NZ Funds active investment management approach, the guidelines may be exceeded from time to time. Where this occurs, the Portfolio is either realigned to come within the guidelines, or the guidelines are changed to reflect a change in the implementation of NZ Funds active investment management of the Portfolio. It is therefore anticipated that the guidelines will change. For more on NZ Funds internal investment guidelines, contact NZ Funds on or [email protected] certain investment instruments and techniques NZ Funds is able to use certain investment instruments and techniques which can be high risk. These instruments and techniques include but are not limited to: Using derivatives: The use of derivatives may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. 54

59 Taking short positions: When taking a short position we seek to profit from a fall in the price of a security. The use of short positions may increase the volatility of a Portfolio and may also significantly increase the risk and extent of any loss. Applying leverage: Leverage occurs where a Portfolio s economic exposure to assets is greater than the amount invested. Leverage occurs by borrowing to invest, or through the use of derivatives. The Portfolios may use leverage to seek to enhance returns and/or to seek to mitigate risk. Leverage can assist in mitigating risk where, for example, an investment is made in order to reduce the risk of potential adverse price movements in a security by taking an offsetting position in the same security or another security, the price of which is expected to move in the opposite direction. The use of leverage may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. Asset concentration: The Portfolios can hold permitted securities or asset classes in any proportion or concentration, meaning that the Portfolios may not be diversified. For example, a Portfolio may be predominantly invested in a specific security, underlying investment manager, asset class, country or sector and may be particularly exposed to any adverse circumstances affecting them. The use of concentrated positions may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. For more on investment instruments and techniques, see pages 14 to 46 and the relevant Prospectus. investment in certain asset classes and/or collective investment vehicles Some securities or asset classes in which the Portfolios invest can be high risk. Examples include but are not limited to: commodities; foreign currencies; emerging market securities; and complex securities such as mortgage backed securities, alternative securities and securities which have the potential to be or are distressed. Also, some collective investment vehicles in which the Portfolios invest can be high risk. Examples include but are not limited to hedge funds and alternative securities funds. Investment in high risk securities, asset classes or collective investment vehicles may increase the volatility of a Portfolio, and may also significantly increase the risk and extent of any loss. For more on the Portfolios current asset allocations, go to key personnel of nz funds The Portfolios may be dependent on the services of key personnel of NZ Funds. The Portfolios may be adversely affected by the departure of key personnel. For more on the team at NZ Funds, go to exposure to involved parties A variety of parties are involved in the Portfolios. Examples include but are not limited to: the custodian of the Wholesale for information Trusts; banks; the Trustee; external only underlying investment managers; settlement and trade counterparties; and investment brokers. These are addition to the wide range of roles NZ Funds performs. The actions or inactions of any of the parties involved may adversely affect the Portfolios. Anticipated relative impact of key factors affecting risk 1 Investment category/ Portfolio Illiquid securities Active investment management approach Wide investment mandate Derivatives Investment instruments and techniques Asset concentration Leverage Short positions Cash Lower Lower Lower Lower Higher N/A Lower Income Higher Medium Medium Medium to High Higher Lower Lower Inflation Medium Higher Higher Medium Medium Medium Medium Growth 2 Medium Higher Higher Higher Medium to High Higher Higher Capital Opportunities Portfolio Higher Higher Higher Higher Higher Higher Higher 1 This table shows our assessment (as at the date of this Investment Statement) of the relative impact of some of the key factors affecting risk within and between each investment category and the Capital Opportunities Portfolio. This table should be read after considering the risk and volatility characteristics of each Portfolio (see pages 12 to 46). 2 Excluding the Capital Opportunities Portfolio nz funds managed portfolio service : : investment statement : : 27 november

60 insolvency or winding up There is a risk that a Portfolio may be wound up. A Portfolio can be wound up in any of the following circumstances: Where NZ Funds determines it to be in the interest of investors in the Portfolio; Where investors in a Portfolio pass an extraordinary resolution to wind up the Portfolio; or On the expiration of 80 years from the commencement date of the Portfolio. If a Portfolio is wound up or becomes insolvent, the assets of the Portfolio will be sold and the proceeds applied first to meet the claims of any creditors. Creditor claims include any claims by the Trustee, NZ Funds, or any other party for fees or expenses. Investors will rank behind all creditors of the Portfolio for payment. You are not liable to pay money to any person beyond the amount of your original investment, other than any PIE tax attributable to you. other factors There are also other factors that may affect the risk of investing in the Portfolios, including, but not limited to: For more on these other factors which may affect the risk of investing in the Portfolios, see the relevant Prospectus. The key factors and other factors above may adversely affect the Portfolios. If the impact of these factors has a negative effect on unit price, you could receive back less than the amount of your investment. There are also other factors that are unknown at the date of this Investment Statement that may affect the risk of investing in the Portfolios. Can the investment be altered? Changing your regular contributions and regular withdrawals You can change the amount or frequency of regular contributions to, and withdrawals from, a Portfolio in which you are invested. You will need to complete a Change in Client Details form and send it to NZ Funds. You can obtain this form from your Authorised Financial Adviser or from NZ Funds. For changes to regular contributions, you will also need to complete the Direct Debit Form attached to this Investment Statement and send it to NZ Funds. For information on setting up a regular contributions programme, see Regular contributions on page 49. For information on setting up a regular withdrawals programme, see Regular withdrawals on page 57. Other ways by which your investment may be altered Related party investments; Investment in WholesaleTrusts; Suspension of redemptions (see page 54); change to redemption restrictions Counterparty and settlement exposures; NZ Funds may from time to time introduce additional or change Foreign currencies; existing limitations, restrictions prohibitions (including Prior Loss of PIE status; Notice Periods and Exit Dates) on redemptions or switching Foreign taxes; between Portfolios. It can do this without prior notice to investors. Changes to laws; or change to investment policies and objectives Natural, political and regulatory conditions. NZ Funds can alter the investment policies and objectives of the Portfolios at any time. NZ Funds will give you at least 10 business days prior notice of any change that alters the fundamental character of a Portfolio in which you are invested. For more on the investment policies and objectives of the Portfolios and how they can be changed, see the relevant Prospectus. change to the trust deed The Trust Deed for any Portfolio may be changed in certain circumstances without prior notice to investors. These circumstances include where the changes are non-prejudicial, or where changes are required for compliance or by law. For more on the circumstances where the Trust Deed for a Portfolio may be changed, see the relevant Prospectus. The Trust Deed for a Portfolio may also be changed by extraordinary resolution passed by investors in that Portfolio. winding up A Portfolio can be wound up. For more on winding up, see What are my risks? on page 54 and the relevant Prospectus. 56

61 How do I cash in my investment? You can cash in your investment in a Portfolio in any of the following ways: Switching between Portfolios (subject to redemption restrictions); Transferring your investments to another party; Redeeming units from the Portfolio by way of regular withdrawals (subject to redemption restrictions); or Redeeming units from the Portfolio by way of a lump-sum withdrawal (subject to redemption restrictions). These are explained in more detail later in this section. It is important to note that NZ Funds may redeem from you any number of units it considers necessary to ensure that the maximum holding restriction is complied with. For more information, see Maximum holding restriction on page 49. There are currently no fees payable to NZ Funds when you cash in your investment from a Portfolio. This may change at any time by NZ Funds giving one month s prior notice. Redemption regular withdrawals A regular withdrawal programme allows you to redeem a set amount (for example, $100 each month) from a Portfolio every month or quarter (or such other time period as NZ Funds in its discretion may agree), without the need to complete a redemption notice for each withdrawal. You should note that any prior notice period that applies to a Portfolio needs to lapse before the first regular withdrawal instruction commences. You can set up a regular withdrawal programme from the following Portfolios only: Core Cash Portfolio; Core Income Portfolio; or Global Income Portfolio. You are encouraged to discuss the need for any regular withdrawal programme with your Authorised Financial Adviser. withdrawals Your investment is accessible and you can generally withdraw all or part of your investment as you decide unless a redemption restriction applies. This is subject to maintaining a minimum account balance of $500. If your account balance falls below this amount, NZ Funds may redeem your units and pay the proceeds to you. Switching between Portfolios redeeming your investment Unless a redemption restriction applies, you can cash in all or If you wish to switch between Portfolios you will need a part of your investment by redeeming units from a Portfolio. to complete a Switch Application Form attached to this You will need to complete a Withdrawal Request Form and Investment Statement and send it to NZ Funds. You will need to be aware of the impact of any redemption restrictions that may affect a Portfolio. For more information, see Notice periods and redemption restrictions on page 58. In certain circumstances NZ Funds has the discretion to defer a switch request for up to two business days before it is processed. You may not revoke any switch request unless NZ Funds agrees. NZ Funds may reject a switch request if it considers that the maximum holding restriction may be breached as a result of switching. For more information, see Maximum holding restriction on page 49. Transferring investments While no established secondary market exists for units in any Portfolio, you are entitled to sell your units to a third party. If you wish to transfer your investment to another individual or entity, you will need to complete a Securities Transfer Form and send it to NZ Funds. You can obtain this form from your Authorised Financial Adviser or from NZ Funds. The new holders of units in the Portfolio are encouraged to advise NZ Funds of their PIE tax rate as soon as an investment is transferred to them. send this to NZ Funds. You can obtain this form from your Authorised Financial Adviser or from NZ Funds. In certain circumstances NZ Funds has the discretion to defer a redemption request for up to two business days before it is processed. You may not revoke any redemption request unless NZ Funds agrees. payment of redemption proceeds Redemption proceeds will be paid after the expiry of any redemption restriction. Redemption proceeds are based on the redemption price per unit redeemed. The redemption price is essentially the net asset value of the Portfolio, less an amount being NZ Funds estimate of the costs of selling the assets of the Portfolio. Further details of the calculation of the redemption price are set out in the relevant Prospectus. Redemption proceeds are normally paid to your nominated bank account within four business days of the expiration of the redemption restriction. Where a redemption restriction does not apply, redemption proceeds are normally paid to your nominated bank account within four business days of a redemption request being received and processed by NZ Funds. nz funds managed portfolio service : : investment statement : : 27 november

62 However, in all cases, it could take up to 20 business days from the expiration of the redemption restriction, or from the receipt of a redemption request, for redemption proceeds to be paid. For more on the impact of any redemption restrictions, see Notice periods and redemption restrictions below. Notice periods and redemption restrictions impact of redemption restrictions on price Redemption proceeds payable in respect of each of the Portfolios, where redemption restrictions apply, will be calculated on the relevant date or Exit Date (as the case may be) that the applicable prior notice period expires and not on the day that you provide the relevant Withdrawal Request Form or Switch Application Form to NZ Funds. You should be aware that this could affect the amount of the proceeds paid as unit prices could fluctuate up or down during this time. prior notice periods If you are invested in the following Portfolios you must give 63 days prior notice of your intention to redeem or switch your investment: Core Income Portfolio; Global Income Portfolio; Core Inflation Portfolio; Property Inflation Portfolio; Equity Inflation Portfolio; Core Growth Portfolio; Global Multi-Asset Growth Portfolio; Global Equity Growth Portfolio; or Dividend and Growth Portfolio. capital opportunities portfolio - prior notice If you are experiencing financial hardship or in other periods and exit dates exceptional circumstances as determined by NZ Funds, for If you are invested in the information Capital Opportunities Portfolio you NZ Funds may exercise its discretion only to waive the notice period must give 91 days prior notice of an intention to redeem a particular redemption from a Portfolio. This discretion will switch your investment. generally apply to one redemption at a time. In addition, redemptions and switches from the Capital You may need to provide further information to NZ Funds in Opportunities Portfolio are only permitted to occur on certain dates set by NZ Funds from time to time (Exit Dates). The Exit Dates currently scheduled for the Capital Opportunities Portfolio are set out in the table below. The table below also sets out the latest Notification Date by which you must give your prior notice to NZ Funds to redeem or switch on a particular Exit Date. Notification date Exit date 11 November February February May May August August November November February 2017 The Notification Date for investors exiting on 10 February 2016 has already passed. It is the intention of NZ Funds to set other Notification Dates and Exit Dates from time to time. These may be obtained by contacting NZ Funds. scaling back redemption requests NZ Funds is entitled, at its discretion, to scale back certain redemptions so that only a proportion of units requested to be redeemed are redeemed. suspension of redemptions NZ Funds may suspend redemptions. If redemptions are suspended, you may not be able to cash in your investment when you wish. For more on the suspension of redemptions, see page 54. For more information, including any ability for NZ Funds to continue to allow an investor to redeem all their units in these circumstances, see the relevant Prospectus. waiver of notice period order to confirm the existence of financial hardship or other exceptional circumstances. Please note that if NZ Funds determines it appropriate to waive the prior notice period for the Capital Opportunities Portfolio for you, you will still only be able to redeem on the next relevant Exit Date. 58

63 Who do I contact with inquiries about my investment? NZ Funds NZ Funds can assist with any inquiries about a Portfolio or your investment in a Portfolio. NZ Funds can be contacted as follows: Attention: Head of Client Services New Zealand Funds Management Limited Level 16, Zurich House 21 Queen Street Private Bag Auckland 1142 tel: (09) or fax: (09) [email protected] Advice regarding whether to invest or not invest in a Portfolio should be sought from an Authorised Financial Adviser. Is there anyone to whom I can complain if I have problems with the investment? In the first instance, please contact NZ Funds. Our contact details are set out under Who do I contact with inquiries about my investment?. You may also contact your Authorised Financial Adviser. Complaints about an investment can also be made direct to the Trustee or to Financial Services Complaints Limited (FSCL), NZ Funds and the Trustee s approved dispute resolution scheme. Trustee Attention: Relationship Manager NZ Funds Managed Portfolio Service The New Zealand Guardian Trust Company Limited Level Queen Street PO Box 274 Auckland 1140 Authorised Financial Adviser tel: (09) for You can also direct any information inquiries to your Authorised Financial only Adviser. [email protected] FSCL Financial Services Complaints Limited PO Box 5967 Wellington 6145 tel: (04) or fax: (04) [email protected] Financial Markets Authority You can also make a complaint to the Financial Markets Authority. Financial Markets Authority Level 2 1 Grey Street PO Box 1179 Wellington 6140 tel: fax: (04) nz funds managed portfolio service : : investment statement : : 27 november

64 What other information can I obtain about this investment? Investor information Annually you will receive: How do I apply? How to invest You can only subscribe for units in a Portfolio by completing the Application Form attached to this Investment Statement. Two areas which often cause confusion are discussed in more detail below. They are selecting the right PIE tax rate and verifying your identity. Either a link to, or a copy of the audited financial statements of the Portfolios; and A personalised annual tax statement. Bi-annually you will receive: A statement of units. Information available on request Selecting the right PIE tax rate It is important that the PIE tax rate information in the Application Form is completed. If a PIE tax rate is not supplied, your investments will be taxed at the default rate of 28%. You will also need to supply your IRD number when you make your initial investment. If an IRD number is not provided, the Application Form cannot be processed and no investment will be made. You are also entitled to request the following information from Non-resident clients are not required to provide an IRD number NZ Funds at any time: but must state their country of tax residence and elect the 28% PIE tax rate. A certificate of holdings; A copy of the current Investment Statement; if you are an individual client A copy of the relevant Trust Deed (and any amendments); To select your correct PIE tax rate you need to calculate your A copy of the relevant current registered Prospectus and taxable income and PIE income for each of the previous two any associated documents; and income years (an income year is the period from 1 April in one information year to 31 March the next year). The PIE only tax rate applying to you is A copy of the most recent financial statements a then determined based on the year which has the lower combined Portfolio. income amount. The PIE tax rates currently applicable and the The information will be supplied free of charge within five income levels they apply to are set out in the following table: business days of the request being made to NZ Funds. Our contact details are set out on page 59. pie tax rates Additional information available Further information about the Portfolios is contained in the relevant Prospectus, Trust Deed and financial statements for each Portfolio. These documents are available free of charge from NZ Funds. In addition, the relevant Trust Deed, all material contracts, relevant Prospectus and Portfolios financial statements, and other documents relating to the Portfolios are filed on a public register at the Companies Office of the Ministry of Business, Innovation & Employment and are available for public viewing, via the Companies Office website at by searching New Zealand Funds Management Limited. Taxable income Taxable income and PIE income Rate $0 $14,000 AND $0 $48, % $0 $14,000 AND $48,001 $70, % $14,001 $48,000 AND $0 $70, % Over $48,001 AND Any amount 28.0% Any amount AND Over $70, % It is important that you select the correct PIE tax rate. The Trustee and NZ Funds are entitled to rely on the PIE tax rate you have elected as being true and correct. If you select a PIE tax rate that is too high, there is no ability under current law to obtain a refund for the excess tax paid. If you select a PIE tax rate that is too low, you may have to file a tax return and pay tax at your marginal tax rate, which could be as high as 33%. You may also be liable for penalties for electing an incorrect PIE tax rate. change of pie tax rate You can change your PIE tax rate by completing and signing a Notice to Change PIE Tax Details Form. You can obtain this form from your Authorised Financial Adviser or from NZ Funds. 60

65 You are encouraged to complete a Notice to Change PIE Tax Details Form as soon as you wish to alter your PIE tax rate. For more on PIEs and PIE tax generally, see What returns will I get? on page 53 or discuss it with your Authorised Financial Adviser. if you are a trust or company If the entity client is a trust, depending on the type of trust, the following PIE tax rate options are available: Testamentary trusts 0%, 10.5%, 17.5% or 28%. A testamentary trust is a trust where all the settlements on the trust were made under a will, codicil, intestacy or court variation. For all other trusts 0%, 17.5% or 28%. All other types of entity clients must elect the 0% PIE tax rate. If you have elected 0% as your PIE tax rate, you will be treated as a zero-rated investor and you will be required to file a tax return with the IRD and pay tax on income allocated to you. For more on PIEs and PIE tax generally, see What returns will I get? on page 53 or discuss it with your Authorised Financial Adviser. Verification for individuals If you are applying on another s behalf, you acknowledge that you are authorised to provide personal information on behalf Under the Anti-Money Laundering and Countering Financing of the applicant and evidence of this authority will be provided of Terrorism Act 2009, we are required to verify your identity upon request (in the case of a parent/guardian/other providing for and address and in some information cases, proof of the source of your about the applicant). only funds. We have included various AML forms attached to this Investment Statement which will guide you through this You agree that your/each of your names and addresses may process. A flowchart is also attached which indicates the be used by NZ Funds to provide you with newsletters and circumstances in which each AML form applies. other information about the Portfolios and other products If you complete the Application Form with an Authorised Financial Adviser, he or she will be able to verify both your identity and residential address as indicated in the relevant AML form(s). If you are completing the AML forms without the assistance of an Authorised Financial Adviser, the identification documents can be certified by a trusted referee. Again, further details regarding this certification process are contained in the attached AML forms. Please note that we cannot process your application unless all AML required forms are completed correctly and accompanied by the appropriate identity documents. Verification for trusts and companies AML verification requirements also apply to trusts and companies. The combination of AML forms which should be used for these entities is indicated by the flowchart on page 83 of this Investment Statement. The AML forms required can be found behind the flowchart and set out all supporting documentation which is required. Please note that the application by the investing entity can only be processed if accompanied by all necessary AML forms and appropriate supporting documentation. change of personal details If you wish to change your name or postal address, please complete a Change in Client Details Form. You can obtain this form from your Authorised Financial Adviser or from NZ Funds. Privacy Act The personal information provided in connection with your investment in the Portfolios may be used by NZ Funds, the Trustee (including their related entities), your Authorised Financial Adviser and by other service providers to the Portfolios, for the purposes of enabling NZ Funds and those service providers to arrange and manage your investment (including for the purposes of electronic identity verification) and to contact you in relation to your investment. Personal information may also be shared with relevant authorities, including the IRD. NZ Funds may also use that information to provide you with information about other products and services. NZ Funds will provide you (on request) with the name and address of any entity to which information has been disclosed. You have the right to access all personal information held about you in connection with your investment in the Portfolios. If any of the information is incorrect, you have the right to have it corrected under the Privacy Act and services. Foreign Account Tax Compliance Act (FATCA) If you are a US Person (that is, someone who is a United States citizen or tax resident, or a United States Green Card holder, or an entity owned or controlled by US persons) we may be required to provide certain information about your investment in the NZ Funds Managed Portfolio Service to the Inland Revenue Department (IRD) in order to satisfy our obligations under the Foreign Account Tax Compliance Act (FATCA). The IRD in turn may be required to pass this information to the United States Internal Revenue Service. If you are a US Person, you agree that we may provide this information to the IRD in order to satisfy our FATCA obligations. nz funds managed portfolio service : : investment statement : : 27 november

66 Glossary Investment terms Term Definition Alternative securities Asset classes not usually accessed by retail investors, for example private equity, venture capital and hedge funds. These tend to be asset classes where valuation and liquidity may be uncertain and returns may be volatile. Alternative securities includes derivatives on Alternative securities. Australasian equities Shares listed on New Zealand or Australian stock exchanges and derivatives on Australasian equities. Cash and cash equivalents Cash, or other assets that can be readily converted into cash, including bank term deposits and short term debt securities. for information An entity that allows investors to pool their capital together to invest, only rather than each Collective investment vehicle individual investor buying investments directly. These vehicles are usually managed by a fund manager. Commodities A product which is, for example, agricultural, mineral or energy related, and is interchangeable with another product of the same type, and which may be bought or sold directly or indirectly through derivatives. Debt securities Debt securities are securities issued by an entity to enable it to borrow money. They are usually accompanied by an offering document which sets out the terms of the loan, for example the period of time before repayment and the interest rate payable if applicable. Debt securities cover a wide range of issuing entities and security types. Examples include government bonds, corporate bonds, structured credit securities, perpetual securities, distressed debt securities and derivatives on debt securities. Debt securities held by a Portfolio may be secured or unsecured over the assets of the borrower and may be subordinated, meaning that the Portfolio may be repaid or receive interest only after other creditors of the borrower have been paid. Debt securities also include, but are not limited to, loans, floating rate securities and zerocoupon bonds. Debt securities and fixed interest are referred to interchangeably throughout this Investment Statement. Derivative A financial instrument, the value of which is derived from changes in the value of another asset (for example, a share market index or a commodity index, an interest rate, or an exchange rate). Examples of derivatives include futures, options, forwards and swaps. 62

67 Term Definition Foreign currency Assets denominated in a currency other than the New Zealand dollar. Exposure to Foreign currency can be direct or indirect through derivatives. Growth-orientated assets Assets whose return is expected to be made up predominantly of capital gains and losses over the investment period and/or securities whose expected yield or return of capital is relatively high. Shares are usually referred to as growth-orientated assets. Hedging An investment made in order to reduce the risk of potential adverse price movements in a security by taking an offsetting position in the same security or a position in a related security or different security the price of which is expected to move in the opposite direction. Hedging can be achieved through the use of derivatives. Assets whose return is expected to be made up predominantly of interest income. Cash and Income-orientated assets cash equivalents and fixed interest are usually referred to as income-orientated assets. International equities Shares listed on stock exchanges (other than New Zealand or Australian stock exchanges) and derivatives on International equities. International fixed interest or New Zealand fixed interest See definition of Debt securities. Leverage Leverage occurs where a Portfolio s economic exposure to assets is greater than the amount invested. Leverage occurs by borrowing to invest, or through the use of derivatives. Listed property Shares listed on stock exchanges which own or invest in property, buildings or land, and derivatives on Listed property. Short positions An investment made to profit from a fall in the price of a security. If the price of the security rises, a loss may be incurred. nz funds managed portfolio service : : investment statement : : 27 november

68 Other terms Term Definition AML To help prevent laundering of the proceeds of crime, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires NZ Funds to obtain proof of your identity and in some cases, proof of the source of your funds, before we are able to accept your application. Associated person This term is defined in the laws and regulations on income tax in New Zealand. An associated person is a person linked with the investor for New Zealand tax purposes. External underlying investment manager A specialist investment manager selected by NZ Funds who may manage a portfolio of securities directly held by a Wholesale Trust or an underlying fund in which a Wholesale Trust invests. Gross asset value The value of the assets of a Portfolio before subtracting any liabilities. Net asset value The value of the assets of a Portfolio, less any liabilities. PIE rules The laws and regulations on PIEs. PIE tax rate The tax rate that an investor tells a PIE to use to calculate the amount of income tax payable by the PIE on their behalf (also known as prescribed investor rate ). Portfolio Investment Entity (PIE) A collective investment entity registered with the Inland Revenue Department to allow investors to be taxed on their investment income at their PIE tax rate. Total gross assets For the purposes of calculating a performance fee in respect of any Portfolio, total gross assets means an average of the gross asset value calculated from the first day of the current financial year to the relevant pricing date of that Portfolio. Trust Deeds In respect of the Core Inflation Portfolio and the Equity Inflation Portfolio, the Trust Deed dated 8 August 1988 (as amended); and in respect of the other Portfolios, the Trust Deed dated 28 February 2008 (as amended). Wholesale Trust A wholesale fund managed by NZ Funds which holds investments. Those investments may include directly held securities and/or investments in funds managed by either NZ Funds or external underlying investment managers. Zero-rated investor An investor with a PIE tax rate of 0%. 64

69 section 3 Application Forms and AML Forms application 67 existing client application form 73 switch application form 77 direct debit form 81 aml forms why every investor must complete aml 83 for an individual 85 for a representative acting on behalf of a client 87 for a trust 89 for a company 91

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71 Application Form Relating to the Investment Statement dated 27 November Return to New Zealand Funds Management Limited, Private Bag 92226, Auckland Please print in BLOCK letters and complete all fields unless not applicable. Client details Account name Existing client Yes - NZ Funds client number Not an existing client Type of client Individual or joint Company Trust Other, please specify address If you supply an address, we will send you information pertaining to your investment with us by electronic means. We suggest using your personal rather than work address as this is less likely to change over time. No Telephone for information ( ) ( ) only Mobile Home Business Postal address Street/PO Box Suburb City Postcode Individual 1 Name Title (Mr / Mrs / Miss / Ms / Dr) First name Middle name(s) Surname Are you a New Zealand tax resident? Yes No If Yes, please provide your IRD Number. IRD Number Date of birth Are you a US Person? (A US Person includes a US tax resident, citizen or permanent resident/green Card holder) Yes No If Yes, please provide your US Taxpayer Information Number. Are you a citizen or tax resident of any other country? (i.e. not including New Zealand or the United States) Yes No If Yes, please list each country and provide your tax identification number for each. Country Tax identification number Country Tax identification number nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : application form 1 67

72 Individual 2 (if a joint account) Name Title (Mr / Mrs / Miss / Ms / Dr) First name Middle name(s) Surname Are you a New Zealand tax resident? Yes No If Yes, please provide your IRD Number. IRD Number Date of birth Are you a US Person? (A US Person includes a US tax resident, citizen or permanent resident/green Card holder) Yes No If Yes, please provide your US Taxpayer Information Number. Are you a citizen or tax resident of any other country? (i.e. not including New Zealand or the United States) Yes No If Yes, please list each country and provide your tax identification number for each. Country Tax Identification Number Country Tax Identification Number Company/Trust/Other Full name of Company/Trust/Other IRD Number Is the Company/Trust/Other owned controlled by a US Person? (A US Person includes a US tax resident, citizen permanent resident/green Card holder) Yes No If Yes, please list the name and US Taxpayer Information Number for each owner or controlling person. Name US Taxpayer Information Number Name Full name(s) of Director(s) / Trustee(s) US Taxpayer Information Number PIE tax details You must select a PIE tax rate and provide your IRD Number for this investment. If this is not provided, the Application Form cannot be processed. Joint clients can advise only one IRD Number for all PIE investments held by their joint account. The IRD Number of the individual/entity with the highest PIE tax rate will apply. The rate you have elected will apply to all of your PIE investments. Non-residents must elect the highest PIE tax rate. PIE tax rate 0% 10.5% 17.5% 28% Please indicate the individual/entity whose IRD Number will apply Individual 1 Individual 2 Company/Trust/Other For assistance in selecting your appropriate PIE tax rate refer to the table set out in the Selecting the right PIE tax rate section in the Investment Statement. 68 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : application form 2

73 Bank details This is the bank account into which all withdrawal payments and distributions (if any) will be deposited. Please give details for one bank account only. The bank account should be in the same name as your NZ Funds account. Bank account name Bank Branch Bank Branch Account number Suffix Please attach a deposit slip or other confirmation of your bank account details. Investment options Category Portfolio name Notice period Lump-sum investment Upfront adviser fee* Cash Core Cash Portfolio None $ $ Income Core Income Portfolio 63 days $ $ Global Income Portfolio 63 days $ $ Core Inflation Portfolio 63 days $ $ Inflation Property Inflation Portfolio 63 days $ $ for Equity Inflation information Portfolio 63 days $ only $ Core Growth Portfolio 63 days $ $ Global Multi-Asset Growth Portfolio 63 days $ $ Growth Global Equity Growth Portfolio 63 days $ $ Dividend and Growth Portfolio 63 days $ $ Capital Opportunities Portfolio Exit dates and notice periods $ $ Total $ $ * The client(s) authorise(s) NZ Funds to deduct units from the client s holdings in the relevant Portfolio to fund the payments of this fee to the Authorised Financial Adviser. Please make any cheques payable to NZ Guardian Trust - NZ Funds MPS marked Account Payee Only. Withdrawals are permitted only on the Exit Dates (if applicable) and after the expiry of the relevant notice period. For more details please refer to the section headed How do I cash in my investment? in the Investment Statement. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : application form 3 69

74 Regular contribution details If you have elected to make regular contributions, please indicate the details of your contributions in the table below. Please note that regular contributions are not available for the Capital Opportunities Portfolio. Category Portfolio name Frequency* Amount Start date** Cash Core Cash Portfolio $ Income Core Income Portfolio $ Global Income Portfolio $ Core Inflation Portfolio $ Inflation Property Inflation Portfolio $ Equity Inflation Portfolio $ Core Growth Portfolio $ Growth Global Multi-Asset Growth Portfolio $ Global Equity Growth Portfolio $ Dividend and Growth Portfolio $ Total $ * for Frequency periods regular information contributions are weekly, fortnightly, monthly quarterly. only ** Please complete a Direct Debit Form (attached) and note Start date must be a minimum of 10 days from expected receipt date by the Manager. Regular withdrawal details Your regular withdrawals will continue until otherwise advised. Please note that regular withdrawals are permitted only from the following Portfolios. Category Portfolio name Notice period Frequency* Amount Start date** Cash Core Cash Portfolio None $ Income Core Income Portfolio 63 days $ Global Income Portfolio 63 days $ * Frequency periods for regular withdrawals are monthly or quarterly. ** Please note that withdrawal notice periods will apply before the first regular withdrawal payment commences, with proceeds paid to your nominated bank account within four business days following. For more details, please refer to the section headed How do I cash in my investment? in the Investment Statement. 70 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : application form 4

75 Terms and conditions I/we confirm that: All details provided in this Application Form are correct. The terms and conditions of the current Investment Statement, relevant Prospectus and relevant Trust Deed for the Portfolios apply to the investment. Personal information provided in this Application Form will be used by the Manager and the Trustee and any related entities of these parties, together with my/our Authorised Financial Adviser for administering the investment, including satisfying the requirements of the AML/CFT Act (this may include using your personal information for the purpose of electronic identity verification using various third-party databases including the Department of Internal Affairs database). I/we understand my/our personal information may also be shared with relevant authorities including IRD. I am/we are entitled to access and correct this information. I/we consent to the Manager communicating with me by electronic means (i.e. by , as provided by me, and/or by providing me with a URL link). These communications may include, but not be limited to, general correspondence, Investment Bulletins or updates, and legally required communications. If two or more individuals have completed this Application Form, and separate ownership is not defined, the Manager and the Trustee are entitled to assume the investment is jointly held by those individuals. The Manager and the Trustee are entitled to rely on my/our elected PIE tax rate for all investments I/we have made for this account. I/we have received, read and understood the Investment Statement dated 27 November 2015, and all questions I/we have raised about the Portfolios have been answered to my satisfaction. This Application Form has been detached from the Investment Statement dated 27 November I/we understand the value of any investment in a Portfolio can rise and fall depending on market conditions and other circumstances prevailing at the time, and that there is no promise or guarantee made by any person as to the performance of any investment or the return of any funds invested. Client signature(s) I/we agree to the Terms set out above. If signing on behalf of an Individual/Company, please name the Individual/Company. Individual 1/Director/Trustee Date Individual 2/Director/Trustee Date Director/Trustee Date Director/Trustee Date Authorised Financial Adviser use only I am an Authorised Financial Adviser authorised to provide financial adviser services in relation to this transaction, and that any upfront adviser fee and client fee agreement is: Authorised for deduction under an agreement with the Client; and The amount of the fee or fees does not exceed the amount(s) specified in the agreement with the client. Adviser name Adviser FSP number Adviser company Adviser code Adviser signature Date Note The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires verification of identity. Please ensure all the relevant AML forms are completed in full, if applicable. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : application form 5 71

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77 Existing Client Application Form Relating to the Investment Statement dated 27 November Return to New Zealand Funds Management Limited, Private Bag 92226, Auckland Please print in BLOCK letters and complete all fields unless not applicable. Client details Account name NZ Funds client number Type of client address Individual or joint Company Trust Other (Please specify) If you supply an address, we will send you information pertaining to your investment with us by electronic means. We suggest using your personal rather than work address as this is less likely to change over time. No Investment options Category Portfolio name Notice period Lump-sum investment Upfront adviser fee* for Cash Core Cash information Portfolio None $ only $ Core Income Portfolio 63 days $ $ Income Global Income Portfolio 63 days $ $ Core Inflation Portfolio 63 days $ $ Inflation Property Inflation Portfolio 63 days $ $ Equity Inflation Portfolio 63 days $ $ Core Growth Portfolio 63 days $ $ Global Multi-Asset Growth Portfolio 63 days $ $ Growth Global Equity Growth Portfolio 63 days $ $ Dividend and Growth Portfolio 63 days $ $ Capital Opportunities Portfolio Exit dates and notice periods $ $ Total $ $ * The client(s) authorise(s) NZ Funds to deduct units from the client s holdings in the relevant Portfolio to fund the payments of this fee to the Authorised Financial Adviser. Please make any cheques payable to NZ Guardian Trust - NZ Funds MPS marked Account Payee Only. Withdrawals are permitted only on the Exit Dates (if applicable) and after the expiry of the relevant notice period. For more details please refer to the section headed How do I cash in my investment? in the Investment Statement. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : existing client application form 1 73

78 Regular contribution details If you have elected to make regular contributions, please indicate the details of your contributions in the table below. Please note that regular contributions are not available for the Capital Opportunities Portfolio. Category Portfolio name Frequency* Amount Start date** New/Amend Cash Core Cash Portfolio $ N A Income Core Income Portfolio $ N A Global Income Portfolio $ N A Core Inflation Portfolio $ N A Inflation Property Inflation Portfolio $ N A Equity Inflation Portfolio $ N A Core Growth Portfolio $ N A Growth Global Multi-Asset Growth Portfolio $ N A Global Equity Growth Portfolio $ N A Dividend and Growth Portfolio $ N A Total $ * for Frequency periods regular information contributions are weekly, fortnightly, monthly quarterly. only ** Please complete a Direct Debit Form (attached) and note Start date must be a minimum of 10 days from expected receipt date by the Manager. Regular withdrawal details Your regular withdrawals will continue until otherwise advised. Please note that regular withdrawals are permitted only from the following Portfolios. Category Portfolio name Notice period Frequency* Amount Start date** New/Amend Cash Core Cash Portfolio None $ N A Income Core Income Portfolio 63 days $ N A Global Income Portfolio 63 days $ N A * Frequency periods for regular withdrawals are monthly or quarterly. ** Please note that withdrawal notice periods will apply before the first regular withdrawal payment commences, with proceeds paid to your nominated bank account within four business days following. For more details, please refer to the section headed How do I cash in my investment? in the Investment Statement. Bank details This is the bank account into which all withdrawal payments and distributions (if any) will be deposited. Please give details for one bank account only. The bank account should be in the same name as your NZ Funds account. Bank account name Bank Branch Bank Branch Account number Suffix Please attach a deposit slip or other confirmation of your bank account details. 74 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : existing client application form 2

79 Terms and conditions I/we confirm that: All details provided in this Existing Client Application Form are correct. The terms and conditions of the current Investment Statement, relevant Prospectus and relevant Trust Deed for the Portfolios apply to the investment. Personal information provided in this Existing Client Application Form will be used by the Manager and the Trustee and any related entities of these parties, together with my/our Authorised Financial Adviser for administering the investment, including satisfying the requirements of the AML/ CFT Act (this may include using your personal information for the purpose of electronic identity verification using various third-party databases including the Department of Internal Affairs database). I/we understand my/our personal information may also be shared with relevant authorities including IRD. I am/we are entitled to access and correct this information. I/we consent to the Manager communicating with me by electronic means (i.e. by , as provided by me, and/or by providing me with a URL link). These communications may include, but not be limited to, general correspondence, Investment Bulletins or updates, and legally required communications. If two or more individuals have completed this Existing Client Application Form, and separate ownership is not defined, the Manager and the Trustee are entitled to assume the investment is jointly held by those individuals. The Manager and the Trustee are entitled to rely on my/our elected PIE tax rate for all investments I/we have made for this account. I/we have received, read and understood the Investment Statement dated 27 November 2015, and all questions I/we have raised about the Portfolios have been answered to my satisfaction. This Existing Client Application Form has been detached from the Investment Statement dated 27 November I/we understand the value of any investment in a Portfolio can rise and fall depending on market conditions and other circumstances prevailing at the time, and that there is no promise or guarantee made by any person as to the performance of any investment or the return of any funds invested. Client signature(s) I/we agree to the Terms set out above. If signing on behalf of an Individual/Company, please name the Individual/Company. Individual 1/Director/Trustee Date Individual 2/Director/Trustee Date Director/Trustee Date Director/Trustee Date Authorised Financial Adviser use only Where I have previously verified the identity of the client(s) I confirm that the verification remains accurate. I have no reason to believe that the client(s) is/are not who they claim to be. I am an Authorised Financial Adviser authorised to provide financial adviser services in relation to this transaction, and that any upfront adviser fee and client fee agreement is: Authorised for deduction under an agreement with the Client; and The amount of the fee or fees does not exceed the amount(s) specified in the agreement with the client. Adviser name Adviser FSP number Adviser company Adviser code Adviser signature Date Note The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires verification of identity. In certain circumstances you may be required to complete AML Forms. Please ensure all the relevant AML forms are completed in full, if applicable. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : existing client application form 3 75

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81 Switch Application Form Relating to the Investment Statement dated 27 November Return to New Zealand Funds Management Limited, Private Bag 92226, Auckland Please print in BLOCK letters and complete all fields unless not applicable. Client details Account name NZ Funds client number Type of client Individual or joint Company Trust Other (Please specify) address If you supply an address, we will send you information pertaining to your investment with us by electronic means. We suggest using your personal rather than work address as this is less likely to change over time. No Switch instructions Category Portfolio name Notice period Switch from ($ or All ) Switch to ($ or All ) Cash Core Cash Portfolio None $ $ Core Income Portfolio 63 days $ $ Income Global Income Portfolio 63 days $ $ Core Inflation Portfolio 63 days $ $ Inflation Property Inflation Portfolio 63 days $ $ Equity Inflation Portfolio 63 days $ $ Core Growth Portfolio 63 days $ $ Global Multi-Asset Growth Portfolio 63 days $ $ Growth Global Equity Growth Portfolio 63 days $ $ Dividend and Growth Portfolio 63 days $ $ Capital Opportunities Portfolio Exit dates and notice periods $ $ Total $ $ If you intend to pay fees to your Authorised Financial Adviser from the Portfolio into which you have switched, your adviser will need to send the Manager details of your new fee agreement (if applicable). Withdrawals are permitted only on the Exit dates (if applicable) and after the expiry of the relevant notice period. For more details please refer to the section headed How do I cash in my investment? in the Investment Statement. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : switch application form 1 77

82 Regular contribution details If you have elected to make regular contributions, please indicate the details of your contributions in the table below. Please note that regular contributions are not available for the Capital Opportunities Portfolio. Category Portfolio name Frequency* Amount Start date** New/Amend Cash Core Cash Portfolio $ N A Income Core Income Portfolio $ N A Global Income Portfolio $ N A Core Inflation Portfolio $ N A Inflation Property Inflation Portfolio $ N A Equity Inflation Portfolio $ N A Core Growth Portfolio $ N A Growth Global Multi-Asset Growth Portfolio $ N A Global Equity Growth Portfolio $ N A Dividend and Growth Portfolio $ N A Total $ for * Frequency periods regular information contributions are weekly, fortnightly, monthly quarterly. only ** Please complete a Direct Debit Form (attached) and note Start date must be a minimum of 10 days from expected receipt date by the Manager. Regular withdrawal details Your regular withdrawals will continue until otherwise advised. Please note that regular withdrawals are permitted only from the following Portfolios. Category Portfolio name Notice period Frequency* Amount Start date** New/Amend Cash Core Cash Portfolio None $ N A Income Core Income Portfolio 63 days $ N A Global Income Portfolio 63 days $ N A * Frequency periods for regular withdrawals are monthly or quarterly. ** Please note that withdrawal notice periods will apply before the first regular withdrawal payment commences, with proceeds paid to your nominated bank account within four business days following. For more details, please refer to the section headed How do I cash in my investment? in the Investment Statement. Bank details This is the bank account into which all withdrawal payments and distributions (if any) will be deposited. Please give details for one bank account only. The bank account should be in the same name as your NZ Funds account. Bank account name Bank Branch Bank Branch Account number Suffix Please attach a deposit slip or other confirmation of your bank account details. 78 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : switch application form 2

83 Terms and conditions I/we confirm that: All details provided in this Switch Application Form are correct. The terms and conditions of the current Investment Statement, relevant Prospectus and relevant Trust Deed for the Portfolio apply to the investment. Personal information provided in this Switch Application Form will be used by the Manager and the Trustee and any related entities of these parties, together with my/our Authorised Financial Adviser for administering the investment, including satisfying the requirements of the AML/ CFT Act (this may include using your personal information for the purpose of electronic identity verification using various third-party databases including the Department of Internal Affairs database). I/we understand my/our personal information may also be shared with relevant authorities including IRD. I am/we are entitled to access and correct this information. I/we consent to the Manager communicating with me by electronic means (i.e. by , as provided by me, and/or by providing me with a URL link). These communications may include, but not be limited to, general correspondence, Investment Bulletins or updates, and legally required communications. If two or more individuals have completed this Switch Application Form, and separate ownership is not defined, the Manager and the Trustee are entitled to assume the investment is jointly held by those individuals. The Manager and the Trustee are entitled to rely on my/our elected PIE tax rate for all investments I/we have made for this account. I/we have received, read and understood the Investment Statement dated 27 November 2015, and all questions I/we have raised about the Portfolios have been answered to my satisfaction. This Switch Application Form has been detached from the Investment Statement dated 27 November I/we understand the value of any investment in a Portfolio can rise and fall depending on market conditions and other circumstances prevailing at the time, and that there is no promise or guarantee made by any person as to the performance of any investment or the return of any funds invested. Client signature(s) I/we agree to the Terms set out above. If signing on behalf of an Individual/Company, please name the Individual/Company. Individual 1/Director/Trustee Date Individual 2/Director/Trustee Date Director/Trustee Date Director/Trustee Date Authorised Financial Adviser use only Where I have previously verified the identity of the client(s) I confirm that the verification remains accurate. I have no reason to believe that the client(s) is/are not who they claim to be. I am an Authorised Financial Adviser authorised to provide financial adviser services in relation to this transaction, and that any upfront adviser fee and client fee agreement is: Authorised for deduction under an agreement with the Client; and The amount of the fee or fees does not exceed the amount(s) specified in the agreement with the client. Adviser name Adviser FSP number Adviser company Adviser code Adviser signature Date Note The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires verification of identity. In certain circumstances you may be required to complete AML Forms. Please ensure all the relevant AML forms are completed in full, if applicable. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : switch application form 3 79

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85 Direct Debit Form Return to New Zealand Funds Management Limited, Private Bag 92226, Auckland Please print in BLOCK letters and complete all fields unless not applicable. NZ Funds Client details Account name NZ Funds Client number Bank details Bank account name to be debited Bank Branch Account number Suffix Authority to accept direct debits (Not to operate as an assignment or agreement) Authorisation code Bank Branch Date for I/We information authorise you, until further notice writing, to debit my/our account with you all amounts only which New Zealand Funds Management Limited (hereinafter referred to as the Initiator) the registered Initiator of the above Authorisation code, may initiate by Direct Debit. I/We acknowledge and accept that the bank accepts this authority only upon the conditions listed on the reverse of this form. Information to appear on my/our bank statement N Z F M S A V I N G S Payer Particulars Signature(s) Signature Date Signature Date For bank use only Approved Date received: Recorded by: Checked by: Bank stamp /15 Original retain at branch. Copy forward to Initiator if requested. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : direct debit form 1 81

86 Conditions of this Authority to accept Direct Debits 1) The Initiator: a) Undertakes to give notice of the commencement date, frequency and net amount at least 10 calendar days before the first Direct Debit is drawn (but not more than 2 calendar months). This notice will be provided in writing (including by electronic means and SMS where I/we have provided prior written consent (including by electronic means including SMS) to communicate electronically). Where the Direct Debit system is used for the collection of payments which are regular as to frequency, but variable as to amount, the Initiator undertakes to provide me/us with a schedule detailing each payment amount and each payment date. In the event of any subsequent change to the frequency or amount of the Direct Debit, the Initiator has agreed to give advance notice of at least 30 days before the change comes into effect. This notice must be provided in writing (including by electronic means and SMS where I/we have provided prior written consent (including by electronic means including SMS) to communicate electronically). b) May, upon the relationship which gave rise to this Authority being terminated, give notice to the Bank that no further Direct Debits are to be initiated under the Authority. Upon receipt of such notice the Bank may terminate this Authority as to future payments by notice in writing to me/us. c) May, upon receiving written notice (dated after the date of this Authority) from a bank to which I/we have transferred my/our account, initiate Direct Debits in reliance of that written notice and this Authority from the account identified in the written notice. 2) The Customer may: a) At any time, terminate this Authority as to future payments by giving notice of termination to the Bank and to the Initiator by the means agreed by me/us, the Bank and the Initiator. b) Stop payment of any Direct Debit to be initiated under this Authority by the Initiator by giving written notice to the Bank prior to the Direct Debit being paid by the Bank. c) Where a variation to the amount agreed between the Initiator and the Customer from time to time to be direct debited has been made without notice being given in terms of clause 1(a) above, request the Bank to reverse or alter any such Direct Debit initiated by the Initiator by debiting the amount of the reversal of alteration of Direct Debit back to the Initiator through the Initiator s Bank, PROVIDED such request is made not more than 120 days from the date when the Direct Debit was debited to my/our account. 3) The Customer acknowledges that: a) This Authority will remain in full force and effect in respect of all Direct Debits passed to my/our account in good faith notwithstanding my/our death, bankruptcy or other revocation of this Authority until actual notice of such event is received by the Bank. b) In any event this Authority is subject to any arrangement now hereafter existing between me/us and the Bank relation to my/our account. c) Any dispute as to the correctness validity of an amount debited to my/our account shall not be the concern of the Bank except in so far as the Direct Debit has not been paid accordance with this Authority. Any other dispute lies between me/us and the Initiator. d) Where the Bank has used reasonable care and skill in acting in accordance with this Authority, the Bank accepts no responsibility or liability in respect of: - The accuracy of information about Direct Debits on Bank statements; and - Any variations between notices given by the Initiator and the amounts of Direct Debit. e) The Bank is not responsible for, or under any liability in respect of the Initiator s failure to give notice in accordance with 1(a), nor for the nonreceipt, or late receipt of notice by me/us for any reason whatsoever. In any such situation the dispute lies between me/us and the Initiator. f) Notice given by the Initiator in terms of clause 1(a) to the debtor responsible for the payment shall be effective. Any communication necessary because the debtor responsible for payment is a person other than me/us is a matter between me/us and the debtor concerned. 4) The Bank may: a) In its absolute discretion conclusively determine the order of priority of payment by it of any monies pursuant to this or any other Authority, cheque or draft properly signed by me/us and given to or drawn on the Bank. b) At any time terminate this Authority as to future payments by notice in writing to me/us. c) Charge its current fees for this service in force from time-to-time. These terms and conditions are Payments NZ Limited approved and are non-negotiable. October 2015 Waiving of Notice 82 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : direct debit form 2

87 AML Forms Why every investor must complete AML To help prevent laundering of the proceeds of crime, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires NZ Funds to obtain proof of your identity and in some cases, proof of the source of your funds, before we are able to accept your application. The flowchart below indicates the circumstances in which each AML Form applies. Please note that an application can only be processed if accompanied by all necessary AML Forms and appropriate supporting documentation. Form completion flowchart Individual application AML Form 1 Individual to complete (each individual for a joint application) AML Form 1 Representative completes a form for both self and applicant. For example, for both the parent and the child that the parent is representing. Applications on behalf of another person/entity AML Form 2 for information The representative (such as the only attorney, parent of guardian) to complete. Applications by Trusts AML Form 3 A trust representative to complete on behalf of the trust. AML Form 1 Each individual settlor and trustee to complete (also each beneficiary if required). AML Form 4 The corporate trustee (if any) to complete. AML Form 1 Each individual director to complete (also each individual shareholder if required). Applications by Companies AML Form 4 A company representative to complete on behalf of the company. AML Form 3 Each trust shareholder to complete (if required). AML Form 4 Each corporate shareholder to complete (if required). nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml forms 83

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89 AML Form for an Individual (Form 1) Use only for natural persons with an address in New Zealand (or other AML/CFT compliant country). Please print in BLOCK letters and complete all fields unless not applicable. Client details Account name Existing client Yes - NZ Funds client number Not an existing client Individual Name Title (Mr / Mrs / Miss / Ms / Dr) First name Middle name(s) Surname Date of birth Occupation IRD Number Residential address (not PO Box) Street Suburb City Postcode Country of birth Citizenship(s) Identity information In order to verify your identity, select ONLY ONE of the ID option columns below: Option 1 Option 2 Option 3 NZ driver licence. NZ driver licence, OR Passport, OR And ONE of the documents listed below: 18+ card. NZ firearms licence. Credit, debit or eftpos card (Including name and signature) Bank statement Government agency document (e.g., IRD correspondence) And ONE of the documents listed below: Full birth certificate Citizenship certificate Residential address documentation In order to verify your residential address, select ONLY ONE of the options below. This document must be no more than three months old. Bank or financial institution statement Utility document (e.g., electricity, gas, water, landline telephone or Sky TV) Rates or house insurance document Government agency document (e.g., correspondence from IRD or an educational institution) nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for an individual 1 85

90 For persons under 18 years of age Should the identity information options be unavailable, a birth certificate or student card are acceptable. Should the residential address documentation options be unavailable, proof of the address of the parent(s) or guardian(s) that the minor resides with is acceptable. Verification and/or certification The validity of identity documents, if not presented face to face to an Authorised Individual, must be certified by a Trusted Referee. Identity verification by an Authorised Individual* Tick the document(s) selected previously, verify that the details shown by the documents correctly represent the individual s identity information (i.e., name, date of birth and residential address), then photocopy and attach copies to this completed form before signing and dating the statement below. Name I,, Authorised Financial Adviser, have sighted documents provided (copies of which are attached to this form), and have used those documents to verify client identity information as is required by the Anti-Money Laundering and Countering Financing of Terrorism Act Signature of Authorised Individual Date Where originals of the selected documents are not made available, certified copies must be presented. Certification requirements are detailed below. * An Authorised Individual refers to an Authorised Financial Adviser listed on the NZ Funds Register of Individuals Authorised to perform CDD. Certification by a Trusted Referee A Trusted Referee must be: at least 16 years of age; and not related, spouse or partner, living at the same residential address or involved in the transaction or business; and one of the following (please indicate by tick): Commonwealth representative Member of the police Justice of the Peace Registered medical doctor Kaumātua Registered teacher Minister of religion Lawyer Notary Public New Zealand Honorary Consul Member of Parliament Chartered accountant A person who has legal authority to take statutory declarations Note: document certification must occur no earlier than three months prior to the date of presentation. Name I,, Trusted Referee, have sighted the original documents as detailed previously, each of which represents the identity (i.e., name, date of birth and residential address) of, the Individual; and have signed copies of those documents and attached these to this form; and confirm that the copies of those documents are true copies of the original documents of the above named individual that has been sighted by me today. Signature of Trusted Referee Date Exception handling procedures Where an individual is unable to supply documents as detailed previously, please contact NZ Funds on or via at [email protected]. 86 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for an individual 2

91 AML Form for a Representative acting on behalf of a Client (Form 2) Please print in BLOCK letters and complete all fields unless not applicable. Client details Account name Existing client Yes - NZ Funds client number Not an existing client Representative details Name of Representative Relationship to Client Identification requirements for acting on behalf Provide the following identification documents for the acting on behalf relationship as appropriate. for Power of attorney information and certificate of non-revocation only Birth certificate guardianship order of a minor Document evidencing authority Identity verification by an Authorised Individual* Tick the document(s) selected previously, verify that the details shown by the documents correctly represent the acting on behalf information provided on this form. Attach copies to this completed form before signing and dating the statement below. Name I,, Authorised Financial Adviser, have sighted documents provided (copies of which are attached to this form), and have used those documents to verify client identity information as is required by the Anti-Money Laundering and Countering Financing of Terrorism Act Signature of Authorised Individual Date * An Authorised Individual refers to an Authorised Financial Adviser listed on the NZ Funds Register of Individuals Authorised to perform CDD. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for a representative acting on behalf of a client 1 87

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93 AML Form for a Trust (Form 3) Please print in BLOCK letters and complete all fields unless not applicable. Trust details Trust name Existing client Address Yes - NZ Funds client number Not an existing client Street/PO Box Suburb City Postcode Nature/purpose of Trust Individual completing this form Name of individual authorised to act on behalf of the Trust If this person is not a trustee, complete and attach an AML Form 2 a Representative acting on behalf of a client. Settlors Name(s) of settlor(s) An AML form for each settlor AML Form 1 for an individual or AML Form 4 for a Company as appropriate must be completed. Source(s) of funds and wealth Please provide a description of the source of the funds being invested and the source of the wealth of the client. Attach further information, if necessary. Append copies of documentary evidence of the source of funds to this form. We may need to contact you for further information. Jurisdiction In which jurisdiction is the Trust based? New Zealand or another country? Please specify. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for a trust 1 89

94 Identification requirements for Trust Provide the following identification documents for the Trust as appropriate. The Trust Deed*, together with any amendments or supplements relevant to trustees or beneficiaries Resolution or deed of appointment and retirement of trustees Letter of bank account authorised signatories, if available (from the bank) Proof of address, if available (bank statements or IRD correspondence) * Trust Deed should be an orginal certified copy or a copy of the the original document (or certified document) taken by a Trusted Referee/Authorised Individual with a certification/verification on the copy that they have sighted the original document and this is a true copy. Identity verification by an Authorised Individual* Tick the document(s) selected previously, verify that the details shown by the documents correctly represent the trust identity and source of funds and wealth information provided on this form. Attach copies to this completed form before signing and dating the statement below. Name I,, Authorised Financial Adviser, have sighted documents provided (copies of which are attached to this form), and have used those documents to verify client identity information as is required by the Anti-Money Laundering and Countering Financing of Terrorism Act Signature of Authorised Individual Date * An Authorised Individual refers to an Authorised Financial Adviser listed on the NZ Funds Register of Individuals Authorised to perform CDD. Trustees For all Trustees, Trustee appointers and protectors (or any parties if they have control of Trust assets): List full name below and complete AML Form 1 for an Individual for each; and/or If any of the Trustees are companies, please complete and attach AML Form 4 for a Company. Trustee 1 Trustee 2 Trustee 3 Trustee 4 Trust Beneficiaries Choose one of the two options below. Option 1 If the Trust is discretionary or has more than ten named beneficiaries, please insert the relevant Trust Deed clause number(s) or provide a description of each class or type of beneficiary below**. ** Class or type of beneficiary may include discretionary, final or children of settlor. Option 2 If the Trust is not discretionary or has fewer than ten named beneficiaries, please list the full name of each below and complete an AML Form 1 for an Individual on behalf of each. Exception handling procedures Please contact NZ Funds on or via at [email protected] for assistance should any exception arise. 90 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for a trust 2

95 AML Form for a Company (Form 4) Use only for NZ registered companies which do not have nominee shareholders* or shares in bearer form**. Please print in BLOCK letters and complete all fields unless not applicable. Company details Company name Existing client Yes - NZ Funds client number Not an existing client Registered office address Street Suburb City Postcode Principal business address (if different from above) Street Suburb City Postcode Business activity Company registration number Individual completing this Name of individual authorised to act on behalf of the company If this person is not a director, complete and attach an AML Form 2 for a Representative acting on behalf of a client. Identification requirements for company Provide both of the following identification documents (from Companies Office website). Company extract Certificate of incorporation Identity verification by an Authorised Individual Tick the document(s) selected previously, verify that the details shown by the documents correctly represent the company identity information provided on this form. Attach copies to this completed form before signing and dating the statement below. Name I,, Authorised Financial Adviser, have sighted documents provided (copies of which are attached to this form), and have used those documents to verify client identity information as is required by the Anti-Money Laundering and Countering Financing of Terrorism Act Signature of Authorised Individual Date * A nominee shareholder holds shares on behalf of an actual or beneficial owner. ** Shares in bearer form are negotiable instruments whose terms state that they are payable to the bearer. An Authorised Individual refers to an Authorised Financial Adviser listed on the NZ Funds Register of Individuals Authorised to perform CDD. nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for a company 1 91

96 Significant shareholders (who each own more than 25%) List full names of significant shareholders below and complete AML Form 1 for an Individual for each. If any of the significant shareholders are trusts, please complete a separate AML Form 3 for a Trust for each, and if any of the significant shareholders are companies please complete a separate AML Form 4 for a Company for each Directors and others with effective control List full names of all the directors and any other individuals who have effective control of the company. Complete AML Form 1 for an Individual for each Exception handling procedures Please contact NZ Funds on or via at [email protected] for assistance should any exception arise. 92 nz funds managed portfolio service : : investment statement : : dated 27 november 2015 : : aml form for a company 2

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