Kiwibank Investment Portfolio - Investment Statement for the purposes of the Securities Act 1978
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Kiwibank Investment Portfolio Investment Statement for the purposes of the Securities Act 1978 Prepared as at 18 September 2015
AMP Investment Management (N.Z.) Limited is the Issuer and Manager of the Funds offered in this Investment Statement,
which Kiwibank Investment Management Limited has selected to form part of the Kiwibank Investment Portfolio. AMP Capital
Investors (New Zealand) Limited is a promoter of the Funds. Kiwibank Investment Management Limited is a distributor of the
Funds, but not a promoter of the Funds. Kiwibank Investment Management Limited has not prepared this Investment Statement
and is not responsible for its contents. Investments made in the Funds do not represent deposits or other liabilities of Kiwibank,
Kiwibank Investment Management Limited, KB Custodial Limited, New Zealand Post Limited or any other member of the
New Zealand Post Group. They are subject to investment and other risks, including possible delays in payment of withdrawal
amounts in some circumstances, and loss of investment value. No person, including AMP Investment Management (N.Z.) Limited,
AMP Limited, Kiwibank, Kiwibank Investment Management Limited, KB Custodial Limited, New Zealand Post Limited or any
other member of the New Zealand Post Group, the Manager, any member of the AMP Group, the Trustee or the Crown, guarantees
the performance of the Funds or the return of capital invested by you.
In this Investment Statement, “you” or “your” refers to the investor or Unit Holder and “we”, “us”, “our” or “Kiwibank
Investment Management” refers to Kiwibank Investment Management Limited, the distributor of the funds.
Important information Choosing an investment
The information in this section is required under the Securities When deciding whether to invest, consider carefully the answers
Act 1978. to the following questions that can be found on the pages
noted below:
Investment decisions are very important. They often have long-
term consequences. Read all documents carefully. Ask questions. Page
Seek advice before committing yourself. What sort of investment is this? 12
Who is involved in providing it for me? 13
How much do I pay? 15
What are the charges? 15
What returns will I get? 17
What are my risks? 21
Can the investment be altered? 22
How do I cash in my investment? 23
Who do I contact with inquiries about my investment? 24
Is there anyone to whom I can complain if I have
problems with the investment? 24
What other information can I obtain about this investment? 25
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.
1The Financial Markets Authority transition of the Funds to the new FMCA disclosure regime, this
Investment Statement will be replaced by a Product Disclosure
regulates conduct in financial Statement with other relevant information about the Funds being
markets available to investors on the register entry that will be maintained
in respect of them. In addition, the Trust Deed will be replaced
The Financial Markets Authority regulates conduct in with a new trust deed for the Funds that will comply with the
New Zealand’s financial markets. The Financial Markets requirements of the FMCA. Investment in the Funds will continue
Authority’s main objective is to promote and facilitate the to be available as part of the Kiwibank Investment Portfolio after
development of fair, efficient, and transparent financial markets. this transition process is completed.
For more information about investing, go to http://www.fma.govt.nz.
About the Kiwibank Investment
Financial advisers can help you Portfolio
make investment decisions We are pleased to distribute the Kiwibank Investment Portfolio.
Using a financial adviser cannot prevent you from losing money, You can choose from the Kiwibank Investment Portfolio
but it should be able to help you make better investment decisions. investment option (or options) to suit your investment profile,
taking into account the level of risk you are prepared to accept and
Financial advisers are regulated by the Financial Markets
the anticipated return you would like.
Authority to varying levels, depending on the type of adviser and
the nature of the services they provide. Some financial advisers are We have selected three Funds from the AMP Capital Investment
only allowed to provide advice on a limited range of products. Funds range to be a part of the Kiwibank Investment Portfolio:
When seeking or receiving financial advice, you should check: Investment option About the option
the type of adviser you are dealing with: Responsible Aims to provide you with above-cash returns over
Investment Leaders time with capital preservation while investing in
the services the adviser can provide you with: line with responsible investment parameters. To
Conservative Fund do this, it uses appropriate diversification across
the products the adviser can advise you on. asset types, with a distinct bias to income assets
(e.g., bonds).
A financial adviser who provides you with personalised financial
adviser services may be required to give you a disclosure statement Responsible Aims to provide you with high real returns over
Investment Leaders time but has correspondingly high risk while
covering these and other matters. You should ask your adviser
investing in line with responsible investment
about how he or she is paid and any conflicts of interest he or she Growth Fund parameters. It uses diversification across asset
may have. types, with a distinct bias to growth assets (e.g.,
shares).
Financial advisers must have a complaints process in place and
Responsible Investment Aims to provide you with modest real returns over
they, or the financial services provider they work for, must belong time with medium risk while investing in line with
Leaders Balanced Fund
to a dispute resolution scheme if they provide services to retail responsible investment parameters. To do this, it
clients. So if there is a dispute over an investment, you can ask uses diversification across asset types, with a mix
someone independent to resolve it. of income assets (e.g., bonds) and growth assets
(e.g., shares).
Most financial advisers, or the financial services provider they
work for, must also be registered on the financial service providers The Manager has updated its model for calculating the benchmark
register. You can search for information about registered financial returns for the AMP Capital Investment Funds (including, in
service providers at http://www.fspr.govt.nz. respect of the AMP Capital Responsible Investment Leaders
Conservative Fund and the AMP Capital Responsible Investment
You can also complain to the Financial Markets Authority if you
Leaders Growth Fund, by making these calculations using daily,
have concerns about the behaviour of a financial adviser.
rather than weekly, pricing data). This updated model has been
applied retrospectively to the calculation of benchmark returns
for past periods. Accordingly, the benchmark returns for the
Important notice Funds disclosed in this Investment Statement may differ slightly
from those disclosed in previous Investment Statements (with the
This is an Investment Statement prepared in accordance with the result that the extent to which the actual gross returns are lower or
Securities Act 1978 and the Securities Regulations 2009, relating to higher than the corresponding benchmark returns may differ from
an offer of units in certain AMP Capital Investment Funds by AMP that previously disclosed).
Investment Management (N.Z.) Limited. It is prepared as at, and is
dated, 18 September 2015. When you invest in these Funds through us, your Units in the
Funds will be held by KB Custodial as a custodian on your behalf.
We have been advised by AMP Investment Management (N.Z.) KB Custodial is one of our wholly owned subsidiaries and holds
Limited that it intends transitioning the Funds to the new financial Units purchased through us on behalf of investors. Although you
markets conduct regime introduced under the Financial Markets will be the beneficial owner of the Units, as the registered holder,
Conduct Act 2013 (FMCA) in the near future. As part of the
2only KB Custodial will be able to exercise any rights, benefits and Kiwibank’s registration
entitlements in relation to the Units. KB Custodial’s Terms and On 29 November 2001, Kiwibank was registered as a bank under
Conditions, which set out the basis on which it holds your Units the Reserve Bank of New Zealand Act 1989. Kiwibank is required
and exercises those rights, benefits and entitlements, are set out in to comply with the conditions of registration as laid down by the
the application form. Reserve Bank of New Zealand.
In addition to the services detailed in this Investment Statement, The conditions of registration include, but are not limited to:
Kiwibank provides services to investors, such as internet banking governance (including board composition); minimum capital
services. Accordingly, you should also refer to, and if you invest levels; risk measurement processes; and quantitative liquidity
in the Funds, you are bound by, Kiwibank’s General Terms and risk management requirements. Kiwibank’s full conditions
Conditions. These terms govern your use of these Kiwibank services. of registration can be found in Kiwibank’s latest Disclosure
Kiwibank’s General Terms and Conditions are available on Statement and Annual Report at www.kiwibank.co.nz/about-us/
Kiwibank’s website at www.kiwibank.co.nz or at your local legal-docs.asp.
Kiwibank. KB Custodial’s Terms and Conditions (which govern the
basis on which KB Custodial holds Units on your behalf) are set Kiwibank’s principal activities
out in the application form attached to this Investment Statement. Kiwibank offers a range of personal and business transactional
You are required to obtain a copy of this Investment Statement banking, savings accounts, term deposits, home loans, credit cards
prior to investing in the Funds. You should ensure that you and revolving credit products. Kiwibank intends to continually add
take the time to read this Investment Statement (including the to its product suite.
application form and KB Custodial’s Terms and Conditions),
Kiwibank’s General Terms and Conditions, and any other relevant
documentation before making your investment decisions. About AMP Investment
Management (N.Z.) Limited
About Kiwibank Investment AMP Investment Management (N.Z.) Limited is the Issuer
and Manager of the Funds and as such is responsible for the
Management management and administration of the Funds in accordance with
We are a distributor of the Funds and are not a ‘promoter’ of the the terms of the Trust Deed.
Funds for securities law purposes.
This Investment Statement has been prepared by the Manager,
rather than us, and we are not responsible for its contents. We are About AMP Capital Investors
a wholly-owned subsidiary of Kiwibank. (New Zealand) Limited
AMP Capital is the investment manager and a Promoter of the Funds.
About Kiwibank Limited AMP Capital is a leading specialist investment manager managing
around $19 billion* for New Zealand investors.
Kiwibank’s background As a majority owned subsidiary of AMP Limited, AMP Capital
Kiwibank is a wholly-owned subsidiary of New Zealand Post operates independently with a pure investment focus, but benefits
Limited, a state-owned enterprise under the State-Owned from the resources of its parent. With over 200 in-house investment
Enterprises Act 1986. New Zealand Post Limited is the main professionals throughout Australasia and a carefully selected
postal services provider in New Zealand. Kiwibank opened for global network of investment partners, the AMP Group offers
business early in 2002, with the vision of making a difference to significant depth and breadth of investment expertise.
the New Zealand banking industry. Kiwibank sought to prove Increasingly, delivering superior returns to clients involves looking
that there was room for a New Zealand-owned bank to profitably beyond traditional techniques to a new generation of investment
provide better service, better products, lower fees and better portfolios. These require the blending of any number of inputs
interest rates to New Zealanders. such as securities, asset classes, countries, styles and even
Kiwibank’s strategy drew from the country’s past, where managers to obtain the optimal risk and return outcome. To do
historically there had been a bank operating through the Post this well requires real depth of in-house investment expertise, a
Office network, and it looked to the future by embracing new business philosophy open to partnering, and specialist capabilities
technology and a new way of dealing with customers. Kiwibank’s designed to integrate and maximise the two. At AMP Capital,
strategy is to capture and retain customers through offering high there are specialist investment teams across a diverse range of
levels of customer service, competitive pricing and continuous disciplines. Each team focuses on searching out and creating the
innovation in financial products. best investment outcomes for clients.
As at the date of this Investment Statement, Kiwibank employs
about 1,200 staff across the country.
* As at 31 August 2015
3AMP Capital also collaborates with like-minded investment specialists around the world, leveraging our joint expertise to create new investment opportunities. This investment approach capitalises on the strength and breadth of AMP Capital’s investment expertise and is characterised by three distinctive capabilities: Multiple perspectives: research drives every investment decision. Specialist investment teams interact, sharing knowledge and insights to gain multiple perspectives. This diversity of thought allows AMP Capital to see things differently, often producing unique insights that create new ways to add value to clients’ portfolios. Access to rare investment opportunities: scale, brand and relationships give AMP Capital a competitive edge in deal sourcing and origination. This access to rare assets opens up new and different investment opportunities for clients. Progressive portfolio construction: the new generation of investment portfolios demand increasingly complex portfolio construction decisions. With this in mind, AMP Capital has developed proprietary skills and processes that allow it to select and blend a wide range of investment inputs, from individual securities to the right investment partner. AMP Capital uses these skills to meet the diverse risk return objectives of AMP Capital’s clients. Underpinning these capabilities are AMP Capital’s people. AMP Capital seeks to attract the best people, invest in their ongoing professional development, and ensure that their interests are clearly aligned with those of AMP Capital’s clients. The combination of scale, breadth and capability provides access to superior investment opportunities. Reliably, consistently, repeatedly. 4
Kiwibank Investment
Portfolio
Responsible Investment Leaders Currency management
Conservative Fund AMP Capital targets a position of the Fund’s exposure to foreign
currency (excluding Australian dollar) shares being 50% hedged
to the New Zealand dollar (on a net after tax basis, based on the
Investment strategy current maximum PIR). For Australian dollar shares, AMP Capital
The Responsible Investment Leaders Conservative Fund aims targets a position of the Fund’s exposure being 50% gross hedged
to provide you with above-cash returns over time with capital to the New Zealand dollar. For all other asset classes, AMP Capital
preservation whilst investing in line with responsible investment targets 100% currency hedging of foreign currency exposure to the
parameters (see the “Approach to responsible investing” section New Zealand dollar. AMP Capital has the discretion to alter these
on page 12 for more detail). To do this, it uses diversification across target positions should this be deemed appropriate.
asset types, with a distinct bias to income assets (e.g., bonds).
Use of derivatives
Key features The Fund may use derivatives to manage risk and facilitate
A diverse range of predominantly income assets including rebalancing and asset allocation.
fixed interest securities and cash, plus some growth assets
including shares, property and commodities, across Performance objective
New Zealand and global markets. To outperform, over the medium term, the weighted average
One of the most experienced investment management teams return of the market indices used to measure performance of the
for New Zealand investments. underlying funds/assets in which the fund invests.
Active management of asset allocations to suit changing Annual Returns to 31 March
investment environments and conditions. The return received by you if you invest in this Fund will be less
This Fund will invest primarily in other funds, including funds than the Gross Return outlined above once Management Fees,
managed by the Manager or associates of the Manager, but performance fees (if any), expenses and taxes are deducted.
may invest in directly held assets. See pages 92 to 94 of the
Prospectus for a table showing the funds managed by the 8.90%
Manager or an associated person of the Manager in which more 2015
9.01%
than 10% of the value of the Fund has been invested.
Investment guidelines 2014
3.65%
The benchmark asset mix noted below is the expected average 4.49%
asset mix of the Responsible Investment Leaders Conservative
Fund over the long-term. In the short-term and medium-term, AMP 8.21%
Capital will actively manage the Fund within the given ranges: 2013
8.83%
Benchmark Range
(%) (%)
6.10%
New Zealand Cash 25 2012
New Zealand Fixed Interest 25 6.13%
Global Fixed Interest 25
Total Cash and Fixed Interest 75 55-95 6.08%
Australasian Shares 5 2011
6.85%
Global Shares 10
Commodities 3 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
Property1 7 Gross Return Benchmark
Total Growth Assets 25 5-45
Total 100 The performance information set out above shows the performance
of the Fund before it commenced investing in accordance with
1 Includes both New Zealand and Global Property.
responsible investment parameters on 16 April 2015.
5Responsible Investment Leaders Use of derivatives
Growth Fund The Fund may use derivatives to manage risk and facilitate
rebalancing and asset allocation.
Investment strategy Performance objective
The Responsible Investment Leaders Growth Fund aims to provide To outperform, over the medium term, the weighted average
you with high real returns over time but has correspondingly return of the market indices used to measure performance of the
high risk whilst investing in line with responsible investment underlying funds/assets in which the Fund invests.
parameters (see the “Approach to responsible investing” section on
page 12 for more detail). It uses diversification across asset types, Annual Returns to 31 March
with a distinct bias to growth assets (e.g., shares).
13.15%
2015
Key Features 14.57%
A diverse range of predominantly growth assets including
shares, property and commodities, plus some income 10.31%
assets including fixed interest securities and cash, across 2014
10.74%
New Zealand and global markets.
One of the most experienced investment management teams 15.54%
for New Zealand investments. 2013
16.27%
Active management of asset allocations to suit changing
investment environments and conditions. 2.29%
2012
0.81%
This Fund will invest primarily in other funds, including funds
managed by the Manager or associates of the Manager, but
may invest in directly held assets. See page 92 to 94 of the 8.93%
2011
Prospectus for a table showing the funds managed by the 9.48%
Manager or an associated person of the Manager in which
more than 10% of the value of the Fund has been invested. 0 10 20 30 40
Gross Return Benchmark
Investment guidelines
The benchmark asset mix noted below is the expected average
The performance information set out above shows the performance
asset mix of the Responsible Investment Leaders Growth Fund over
of the Fund before it commenced investing in accordance with
the long-term. In the short-term and medium-term, AMP Capital
responsible investment parameters.
will actively manage the Fund within the given ranges:
The return received by you if you invest in this Fund will be less
Benchmark [%] Range [%] than the Gross Return outlined above once Management Fees,
New Zealand Cash 5 performance fees (if any), expenses and taxes are deducted.
New Zealand Fixed Interest 2.5
Global Fixed Interest 2.5
Total Cash and Fixed Interest
Australasian Shares
10
22.5
0-30
Responsible Investment Leaders
Global Shares 52.5 Balanced Fund
Commodities 5
Property5 10 Investment strategy
Total Growth Assets 90 70-100 The Responsible Investment Leaders Balanced Fund aims to
Total 100 provide you with modest real returns over time with medium risk
5 Includes both New Zealand and Global Property. whilst investing in line with responsible investment parameters
(see the “Approach to responsible investing” section on page 12 for
Currency management more detail). To do this it uses diversification across asset types,
AMP Capital targets a position of the Fund’s exposure to foreign with a mix of income assets (e.g., bonds) and growth assets
currency (excluding Australian dollar) shares being 50% hedged (e.g., shares).
to the New Zealand dollar (on a net after tax basis, based on the
current maximum PIR). For Australian dollar shares, AMP Capital Key features
targets a position of the Fund’s exposure being 50% gross hedged A diverse range of growth and income assets including shares,
to the New Zealand dollar. For all other asset classes, AMP Capital property, commodities, fixed interest securities and cash,
targets 100% currency hedging of foreign currency exposure to the across New Zealand and global markets.
New Zealand dollar. AMP Capital has the discretion to alter these
target positions should this be deemed appropriate.
6 One of the most experienced investment management teams Annual Returns to 31 March
for New Zealand investments.
Active management of asset allocations to suit changing
13.06%
investment environments and conditions. 2015
13.34%
This Fund will invest primarily in other funds, including funds
managed by the Manager or associates of the Manager, but
8.78%
may invest in directly held assets. See pages 92 to 94 of the 2014
Prospectus for a table showing the funds managed by the 10.95%
Manager or an associated person of the Manager in which more
than 10% of the value of the Fund has been invested 12.92%
2013
A robust investment process that combines a sustainability 14.96%
focus with stringent financial analysis.
5.87%
Investment guidelines 2012
4.88%
The benchmark asset mix noted below is the expected average
asset mix of the Fund over the long-term. In the short-term and 7.82%
medium-term, AMP Capital will actively manage the Fund with 2011
8.25%
a view to establishing and maintaining the Fund’s asset mix
within the given ranges. There may be times when an asset class
0 5 10 15 20
is not represented (or is not within the specified range) due to
compliance with the responsible investment charter for the Fund. Gross Return Benchmark
Benchmark [%] Range [%] The return received by you if you invest in this Fund will be less
New Zealand Cash 10 than the Gross Return outlined above once Management Fees,
New Zealand Fixed Interest 15
performance fees (if any), expenses and taxes are deducted.
Global Fixed Interest 15
Total Cash and Fixed Interest 40 20-60
Australasian Shares 15 Approach to
Global Shares
Commodities
31
4
responsible investing
Property 10 AMP Capital has established a Responsible Investment Committee
Total Growth Assets 60 40-80 which is responsible for assessing the investments of the
Total 100 Responsible Investment Leaders Balanced Fund, the Responsible
Investment Leaders Conservative Fund and the Responsible
Currency management Investment Leaders Growth Fund, from a socially responsible,
financial and environmental perspective, and which monitors
AMP Capital targets a position of the Fund’s exposure to foreign
adherence to the Responsible Investment Charter that has been
currency (excluding Australian dollar) shares being 50% hedged
established for the Funds.
to the New Zealand dollar (on a net after tax basis, based on the
current maximum PIR). For Australian dollar shares, AMP Capital Where one of the relevant Funds invests in global share funds,
targets a position of the Fund’s exposure being 50% gross hedged the Responsible Investment Committee will seek out funds or fund
to the New Zealand dollar. For all other asset classes, AMP Capital managers which are identified leaders across the industries in a
targets 100% currency hedging of foreign currency exposure to the range of areas including:
New Zealand dollar. AMP Capital has the discretion to alter these Environmental considerations – including energy and
target positions should this be deemed appropriate. resource use and product stewardship (for example, where a
company takes into account the life cycle of the product, from
Use of derivatives manufacture to the extent to which the product can be recycled).
The Fund may use derivatives to manage risk and facilitate
rebalancing and asset allocation. Social considerations – including indigenous relations and
community involvement.
Performance objective Ethical considerations – including meeting fundamental human
To outperform, over the medium term, the weighted average rights, and articulating and implementing a code of conduct.
return of the market indices used to measure performance of the Labour standards – including occupational health and
underlying funds/assets in which the fund invests. safety, International Labour Organisation standards, working
conditions and the exclusion of child labour.
Governance considerations – including meeting corporate
governance guidelines on board structures and remuneration.
7Additionally, fund managers and funds will also be well Each Unit in a Fund is of equal value and confers an equal interest
regarded if they actively participate in corporate engagement and in that Fund. A Unit gives you a beneficial interest in the Fund’s
governance initiatives. Assets. The benefit is undivided. This means you do not have an
interest in any particular part of a Fund or in a particular Asset
Where a Fund invests directly in shares, these share investments
of a Fund. The Assets of one Fund cannot be used to cover the
will also be measured against the above considerations. The Fund
Liabilities of another Fund.
will (at a minimum) avoid investment in any company which
has a substantial exposure to sectors identified as having a high The Investment Policy and investment guidelines reflect the
negative social impact. This means the Fund will avoid exposure, Manager’s current intention in relation to each of the Funds.
either directly or indirectly through underlying managers and The Manager sets the initial Investment Policy and investment
funds, to companies with material exposure to the production guidelines for each Fund and obtains the Trustee’s approval to
or manufacture of alcohol, armaments, gambling, pornography, any changes. Before putting into effect any material changes to the
tobacco and nuclear power (including uranium). Investment Policy for a Fund, the Manager will give notice of the
changes to Unit Holders of the relevant Fund in accordance with
Material exposure is considered to be where a company derives
the terms of the Trust Deed.
more than 10% of its total revenue from these industries.
You should note that while markets have generally improved since
In addition, with the combustion of fossil fuels being the main
the global financial crisis they do remain volatile and you may
source of global greenhouse gas emissions, each of the Funds
experience fluctuations in returns.
seeks to limit exposure to companies which have a material
exposure to the most carbon intensive fossil fuels by excluding The Investment Policy and investment guidelines for a Fund set
any company that has more than a 20% exposure (as measured by out the investment objectives, strategy and philosophy for the
percentage of market capitalisation, or other appropriate financial Fund and may include directions on:
metric) to one, or a combination of, the following:
the level of borrowing and the circumstances in which
Mining thermal coal. a Fund may borrow;
Exploration and development of oil sands. the use of derivatives;
Brown-coal (or lignite) coal-fired power generation. currency management;
Transportation of oil from oil sands. exposure limits for certain securities; and
Conversion of coal to liquid fuels/feedstock. the duration of securities held by a Fund.
Retention and realisation policy
If an investment falls below these responsible investment
standards, it is the policy of the Responsible Investment
Who is involved in providing
Committee to seek to exit that investment within six months after it for me?
becoming aware of this unless remedial action is taken to bring the
The names of the unit trusts established under the Unit Trusts Act
investment back within the responsible investment parameters. An
1960 and the Trust Deed and offered in this Investment Statement
investment may also be realised at any time for financial reasons.
are:
Further information AMP Capital Responsible Investment Leaders Conservative Fund
Further information about the responsible investment processes AMP Capital Responsible Investment Leaders Growth Fund
can be obtained online at www.ampcapital.co.nz.
AMP Capital Responsible Investment Leaders Balanced Fund
Listed below are the details of the organisations involved in
What sort of investment is this? providing these Funds for you as part of the Kiwibank Investment
Portfolio:
The securities offered are Units in the following AMP Capital
Investment Funds: The Manager
AMP Investment Management (N.Z.) Limited
Responsible Investment Leaders Conservative Fund
Ground Floor, PWC Tower
Responsible Investment Leaders Growth Fund 113 – 119 The Terrace
Responsible Investment Leaders Balanced Fund PO Box 3764
Wellington 6140
The Funds are Unit Trusts established under the Unit Trusts
Act 1960 and the Trust Deed. The Trust Deed was amended and Telephone: (04) 494 2200
restated on 2 April 2013. Fax: (04) 494 2100
Email: ampcapital@ampcapital.co.nz
8Directors of the Manager: Administration Manager
Grant David Hassell AMP Capital Investors (New Zealand) Limited
BCA – Wellington, New Zealand Ground Floor, PWC Tower
113 – 119 The Terrace
George William Carter
PO Box 3764
BA (Hons), FNZSA, FIA – Auckland, New Zealand
Wellington 6140
Keith John Poore
AMP Capital can, and does, contract out some or all of its
BCA (Hons), BSC (Hons), SA Fin – Wellington, New Zealand
administration tasks from time to time.
Bevan Trevor Graham
B.Soc.Sci (Economics) – Wellington, New Zealand Distributor
Directors of the Manager can be contacted at the Manager’s Kiwibank Investment Management Limited
address. Level 12, New Zealand Post House
7 Waterloo Quay
The Promoters Private Bag 39888
AMP Capital Investors (New Zealand) Limited Wellington 5045
Ground Floor, PWC Tower Telephone: 0800 11 33 55
113 – 119 The Terrace Fax: (04) 462 7996
PO Box 3764 Email: wealthadmin@kiwibank.co.nz
Wellington 6140
The following directors of AMP Capital Investors (New Zealand) Custodian
Limited who are not also directors of the Manager are also KB Custodial Services Limited
Promoters: Level12, New Zealand Post House
7 Waterloo Quay
Stephen James Peter Dunne (Chairman)
Private Bag 39888
BBus, MBA, CFA, F Fin – Sydney, Australia
Wellington 5045
Sharon Beverley Davis
Telephone: 0800 11 33 55
BA, Gr Dip Bus (Law), Gr Dip Mgt, Member of the Australian
Fax: (04) 462 7996
Institute of Company Directors, Fellow of FINSIA – Sydney,
Email: wealthadmin@kiwibank.co.nz
Australia
Christopher James Judd The Issuer
AssocDip in Valuations, AdvCert in Real Estate, Cert in Financial The Issuer for each of the Funds is AMP Investment Management
Markets – Sydney, Australia (N.Z.) Limited. The principal activity for AMP Investment
Peter Raymond Verhaart Management (N.Z.) Limited is the management and administrative
BSc, PGDip FinMath, Dip Bus Stud – Paraparaumu, New Zealand. control of investment funds. AMP Investment Management
(N.Z.) Limited was incorporated as a company on 26 August 1987
Directors of AMP Capital can be contacted at AMP Capital’s
and has been carrying on those activities since incorporation.
address.
AMP Investment Management (N.Z.) Limited is a wholly-owned
subsidiary of AMP Capital and its ultimate holding company
The Trustee
is AMP Limited (a company incorporated in New South Wales,
The New Zealand Guardian Trust Company Limited
Australia) through a majority shareholding in one of AMP
Level 2, Dimension Data House
Investment Management (N.Z.) Limited’s holding companies.
99-105 Customhouse Quay
Any sale or disposal of Assets to AMP Investment Management
PO Box 913
(N.Z.) Limited or any of its Related Persons (which includes any
Wellington 6140
investment fund managed by AMP Investment Management (N.Z.)
Telephone: (04) 901 5406 Limited or its Related Persons) or the purchase or acquisition of
Fax: (04) 901 0108 any Assets from AMP Investment Management (N.Z.) Limited must
be approved by the Trustee.
You should be aware that the names of directors and addresses
stated above may change from time to time without notice. Current
names and addresses may be obtained by contacting the Manager
at its address stated above.
9How much do I pay? Payments by cheque are to be made payable to: “KB Custodial
Services – Applications Account”.
When you invest through us, the minimum initial lump sum Applications may be refused for any reason.
investment for each Fund is $5,000. Thereafter, the minimum
additional investment is $500 per Fund. The Manager may accept Regular contributions can be made by automatic payment. If you
applications for lesser amounts in its absolute discretion. The Issue are already a Kiwibank customer, you can set up an automatic
Price for Units in a Fund is the net asset value per Unit calculated payment from your Kiwibank account for your regular contributions
by the Manager as at the date the application is accepted, unless by completing section 6 of the application form attached to this
the Trustee gives prior approval for the Issue Price to be the Investment Statement. If you are not a Kiwibank customer, please
latest net asset value per Unit calculated as at a date before the contact us on 0800 11 33 55 for assistance. Following the initial
application is accepted. lump sum investment, the minimum regular contribution when
you invest through us is $50 per fortnight per Fund.
You must complete the application form attached to this
Investment Statement. The completed form, along with any If a payment is dishonoured or reversed, no Units will be issued in
additional information requested on the application form, can be respect of that payment or any Units issued based on that payment
provided to us at any Kiwibank branch or sent to: will be cancelled.
Any funds paid to KB Custodial do not form part of the relevant
KB Custodial Services Ltd Fund and neither the Manager nor the Trustee has any obligations
c/- Kiwibank Investment Management Limited towards those funds until KB Custodial pays those funds to the
Level 12, New Zealand Post House Manager or Trustee (or a nominated person of either of them) in
7 Waterloo Quay return for the issue of Units.
Private Bag 39888
Wellington 5045
What are the charges?
The fees set out in the table below are the fees that you will pay as a result of investing in each Fund.
Fee type Amount p.a. (excluding GST unless stated otherwise) About the fee
Investment Management Fees: This is the annual management fee. See note 1 below.
Responsible Investment Leaders
Conservative Fund 1.00%
Responsible Investment Leaders
Growth Fund 1.20%
Responsible Investment Leaders
Balanced Fund 1.10%
Trustee Fee: Up to 0.1% Paid to the Trustee for services out of each of the
Funds. See note 2 below.
Entry / Exit fees: Entry Exit The Manager charges these fees on the purchase,
Responsible Investment Leaders 0.08% 0.08% redemption or repurchase of Units. The fees stated in
Conservative Fund this table are the entry and exit fees payable at the date
of this Investment Statement. The Manager may vary
Responsible Investment Leaders 0.25% 0.25% the entry and exit fees at any time. The entry and exit
Growth Fund fees are inclusive GST. See note 3 below.
Responsible Investment Leaders 0.17% 0.17%
Balanced Fund
In addition, the Funds may pay fees as a result of investing in other funds (including other funds managed by the Manager, AMP Capital or
a related company) – see notes 4 and 5 below.
10Important notes 3. Entry and exit fees are expressed as a percentage of the
1. The Manager is entitled to deduct a management fee to each relevant aggregate Issue Price or Repayment Price of the
Fund of up to 2% per annum of the Value of the Assets of number of Units being purchased, redeemed or repurchased,
the Fund. The management fees (which are expressed as a and are paid into the relevant Fund. The entry and exit fees
percentage of the Value of the Assets of each Fund) as at the for each Fund are set by the Manager. The entry fee is a fee
date of this Investment Statement are set out in the table above providing for the likely cost of purchasing or developing Assets
and are payable by quarterly instalments from the Fund. The for the Fund, and the exit fee is a fee providing for the likely
Manager may vary the management fee for any Fund. GST is cost of selling or disposing of Assets of the Fund. The Manager
charged at 15% on10% of the management fee in accordance is entitled under the Trust Deed, and reserves the right to
with the non-binding Inland Revenue agreement with the determine the entry and exit fees to be a higher or lower
Financial Services Council of New Zealand Incorporated on percentage than that stated in the table above (including zero).
behalf of the funds management industry. The Inland Revenue You will be advised of the applicable entry fee when you make
is reviewing the portion of management fees subject to GST a subscription and the applicable exit fee when you make a
and this percentage may change in the future. redemption request or your Units are repurchased.
Upon the termination of a Fund, the Manager is entitled to 4. Except as set out in note 5 below, no fees are currently charged
be paid out of the Fund a reasonable fee of such amount as is in respect of investments made by any of the Funds in any
approved by the Trustee, based on time spent by the Manager other funds managed by the Manager, AMP Capital or a related
on matters relating to the termination of the Fund. There is no company.
limit on the amount of this fee, apart from the requirement that 5. A performance fee may be payable to the Manager, AMP
it be reasonable in the circumstances and be approved by the Capital, AMP Capital Investors Limited in Australia or any of
Trustee. the underlying managers used within the Funds. As at the date
While the Manager has no current intention to do so, the Trust of this Investment Statement no performance fees are payable
Deed allows the Manager to charge an initial service fee as in respect of the Funds or other funds into which the Funds
determined by the Manager on the issue of any Unit. Any initial invest.
service fee, if it were to be charged, would be in addition to any
entry fee.
Switching Units
If you wish to switch your investment in one Fund to another Fund
2. The Trustee is entitled to be paid, by way of remuneration for you should make a request through us. The Manager may refuse a
its services, a fee out of each of the Funds. switch request in its absolute discretion. To effect a switch, Units
The Trustee’s fee is determined on the basis of a scale agreed in the relevant Fund will be sold at the applicable Repayment Price
from time to time between the Trustee and the Manager. (see the “How do I cash in my investment?” section on page 23 for
Currently, the Trustee’s fee for each Fund is not to exceed 0.1% information on calculation of the Repayment Price) and Units in
per annum of the average daily Value of the Assets of that the other Fund will be bought at the applicable Issue Price (see
Fund. There are no other limits on the amount of this fee in the “How much do I pay?” section on page 15 for information on
respect of each Fund. calculation of the Issue Price). The entry and exit fees described
above will generally apply. The provisions in the Trust Deeds
In addition, the Trustee is entitled to receive a fee of such
applying to redemption or repurchase of Units and issue of Units
amount as is from time to time agreed between the Manager
will apply to switches.
and the Trustee for convening and attending meetings of
Unit Holders. There is no limit on the amount of this fee. The
Other charges and expenses
Trustee is also entitled to be reimbursed for various expenses
in accordance with the Trust Deed. The Funds will incur brokerage and (where applicable) taxation
and global custodial charges. Some of these charges may be paid
On termination of a Fund, the Trustee is entitled to be paid to AMP Capital for performing investment administration tasks,
from the Fund a reasonable fee of such amount as is approved or to other entities to which AMP Capital contracts investment
by the Manager and based on the time spent by the Trustee administration tasks. All expenses incurred in the operation of
on matters relating to the termination of the Fund. There are the Funds will also be met fully by the Funds. The amount of the
no limits on the amount of this fee in respect of each Fund, expenses and charges will be shown in the Financial Statements
apart from the requirements that it must be reasonable in the for each Fund.
circumstances and be approved by the Manager.
AMP Capital may, in its discretion, choose to cap the amount of
any expenses and charges required to be met by any of the Funds.
These charges may be varied from time to time in accordance with
the Trust Deed for the relevant Fund. For further information on
charges please contact us.
11What returns will I get? –– a New Zealand resident trustee of certain testamentary
trusts that elects to have a 10.5% PIR;
The return on your investment reflects: 17.5% for investors who are:
the increase or decrease in the Unit price; and –– New Zealand resident individuals who do not qualify for
income distributions (for those Funds that make distributions, the 10.5% PIR but who have provided their IRD number
if any). and who derived in either of the last two income years*
preceding the current tax year $48,000 or less of taxable
The Unit price of a Fund reflects the value of the underlying
income (excluding PIE income) and $70,000 or less in
assets of that Fund. The value of your investment at any time
taxable income and PIE income combined; or
will therefore depend on the value of the underlying assets at
that time. The value of Units may vary and, at times may even be –– a New Zealand resident trustee of a trust (except unit trusts
less than you paid. Key factors that determine the Unit price and and charitable trusts but including superannuation funds)
income distributions include market fluctuations in the value that elects to have a 17.5% PIR;
of Fund investments and the income received on them, tax and 28% for non-residents, New Zealand resident individuals
fees. You should note that while markets have generally improved who are not eligible for either the 10.5% PIR or 17.5% PIR and
since the global financial crisis they do remain volatile and you trusts (except unit trusts and charitable trusts but including
may experience fluctuations in returns. Unit prices may also be superannuation funds) that elect to have a 28% PIR;
affected by currency movements where Assets are invested outside
of New Zealand. Where considered appropriate, AMP Capital is 0% for the following entities (if resident in New Zealand):
empowered to use suitable Hedging* techniques to protect the –– charities, PIEs, companies (including deemed companies
value of investments in New Zealand dollar terms. such as unit trusts), proxies; and
No amount of returns, quantifiable as at the date of this Investment –– superannuation funds and trusts that have not elected to
Statement and enforceable by you, is promised. No guarantees have a higher PIR.
of capital or earnings are given, and past performance is not * Income year has the meaning given in section YA 1 of the Income Tax Act 2007
necessarily indicative of future returns. None of the Trustee or and for most investors means the year ending on 31 March
its nominee companies, the Manager, AMP Limited, AMP Capital Your actual rate will depend on your personal circumstances,
or any member of the AMP Group or their respective directors including your taxable and PIE income in the two years preceding
or officers, Kiwibank, Kiwibank Investment Management, KB the current tax year and your tax residency. If you have recently
Custodial, New Zealand Post Limited or any other member of the become a New Zealand tax resident, you must include the total
New Zealand Post Group or any other person guarantees the value amount of your foreign sourced income in your assessable income
of the Units, repayment of any income on the Units or performance when determining your PIR. However, you may choose not to
of the Funds. determine your PIR on this basis in either or both of your first
* See the glossary for an explanation of the term “Hedging”. two years as a New Zealand tax resident, if you expect that your
taxable income in either of these years to be significantly lower
Taxation than your total income in the income year prior to becoming a
Taxation is likely to affect returns from the Funds. New Zealand resident. The description of the PIRs above reflects
The Funds are PIEs. KB Custodial will hold your Units in the Funds the Manager and KB Custodial’s understanding of tax laws as at
as a proxy for you. Accordingly, the Fund pays tax on the taxable the date of this Investment Statement.
income (referred to below simply as “income”) attributed to KB You should check that you have provided the correct PIR.
Custodial on your behalf at 0%, and KB Custodial (as a proxy for
If you do not notify us of your PIR, then the default rate of 28%
you) will pay tax on that income at your selected PIR.
will apply. In the case of joint investors the higher PIR of the joint
investors is used.
What is a Prescribed Investor Rate (PIR)?
Tax is paid by the relevant Fund on the income attributed to you at The Commissioner of Inland Revenue can require the Manager or
your PIR. A PIR is based on your taxable income (e.g., income from KB Custodial to disregard the PIR notified to the Manager by you
salary, wages and any additional sources of income that you would and apply a PIR notified by the Commissioner.
include in your income tax return) and the income attributed to For more information about PIR and to determine your correct PIR
you from any PIEs in which you invest, whether directly or through rate please refer to the IRD website “www.ird.govt.nz/toii/pir/” or
a proxy, including the Funds. contact your professional tax adviser.
The following PIRs apply:
Tax treatment if you are eligible for and notify
10.5% for investors who are: us of a 0% PIR
–– New Zealand resident individuals who have provided If you elect a 0% PIR, then KB Custodial (as proxy) will not
their IRD number and who derived in either of the last two have any tax liability in respect of income attributed to you.
income years* preceding the current tax year $14,000 or You must instead include the attributed income and claim any
less in taxable income (excluding PIE income) and $48,000 attributed losses as deductions in your own tax return. You will be
or less in taxable income and PIE income combined; or responsible for payment of tax on the income attributed to you.
12Tax credits for foreign withholding tax and other types of credits higher than the New Zealand tax rate that applies to income that
such as imputation credits are attributed to you to be credited you may get from other comparable New Zealand investments.
against tax payable in your own tax returns. (Note that these Funds are not “foreign investment PIEs”, the
income from which that is attributed to “notified foreign investors”
Tax treatment if you are eligible for and notify can be taxed at different rates.)
us of a PIR greater than 0% Given that there are a number of circumstances where you may
If you are eligible for and notify a PIR which is greater than 0%, pay more tax in a PIE, rather than other forms of investment, it is
the following will apply to you: important to consult your professional tax advisor to determine
KB Custodial (as proxy) will be liable to pay tax on income whether a PIE is best for you.
attributed to you at your PIR. If there are excess tax credits
for a period or the relevant Fund has a loss rather than net Why do I need a PIR?
income for a period, KB Custodial (as proxy) may in certain The rules relating to the taxation of investment income enable
circumstances receive a tax refund and may be able to pass on funds that become PIEs to calculate their tax using PIRs elected
the benefit of that refund to you. by investors, which can be 28%, 17.5%, 10.5% or 0%, subject to
satisfying various conditions. In order for KB Custodial to pay tax
The tax paid on income attributed to you will be a final tax
on your attributed income from the Funds at the appropriate rate
and you will not be required to file a tax return which includes
(as a proxy), you need to ensure that you have supplied the correct
that income, except if you are a trustee that elects the 10.5%
PIR and IRD number at all times.
or 17.5% PIR or if you have recently become a New Zealand tax
resident and have chosen to disregard foreign income derived
before becoming a New Zealand resident in determining your
When do I need to provide my PIR?
PIR. Such new residents and trustees that elect the 10.5% or You should provide your PIR when you invest in a Fund, along
17.5% PIR will be required to file a tax return including its with your IRD number. Each year, you will be asked to reconfirm
attributed income, with a credit allowed for any tax paid by KB your PIR. You should review your rate each year to ensure it is
Custodial (as proxy) on that income. correct and notify KB Custodial of any changes.
If you have elected a PIR which is too low, or failed to advise It is important that you provide your PIR when requested. If you
the Manager that your PIR has increased, you will be liable to fail to provide your PIR or your IRD number then your investment
include your attributed income in a tax return and to pay tax will be taxed at the default rate of 28%. This rate could be higher
on that income at your relevant marginal tax rate (with a credit than your PIR. If you provide a PIR that is lower than your correct
allowed for tax paid on that income). You may also be liable for PIR, you will be liable to pay tax on the attributed income at your
any penalties or interest which may apply. relevant tax rate after allowing a credit for tax paid on that income
by KB Custodial (as proxy) or the Fund (plus any applicable
If you advise a PIR that is higher than your applicable rate, interest and penalties) and to file a tax return. If you advise a PIR
then you will not be able to claim back the excess tax paid. that is higher than the applicable rate, you will not be able to claim
If the tax liability on income attributed to you exceeds your back the excess tax paid.
investment, some or all of your Units could be redeemed and the
proceeds of the redemption paid to the IRD. To the extent this KB Custodial’s responsibilities
tax liability is not paid by the Fund, you may need to pay the tax In relation to your investment in a Fund or Funds through us, KB
directly to the IRD. Custodial (rather than the Manager) will be responsible for:
calculating and organising payment of the tax liability on
The advantage of PIEs
income attributed to you, using your PIR;
PIE funds provide some investors with a significant benefit over
holding assets (or investments) directly. making adjustments to the Units held on your behalf (by
redeeming Units) or the distributions (if any) made to you or
In particular, PIEs or proxies that invest in PIEs on behalf of requiring you to make a payment to reflect the tax liability on
others, pay tax on income attributed to investors at their relevant income attributed to you;
PIR which is capped at 28%. Investors in a PIE with a marginal
tax rate of 33% who elect the 28% PIR will therefore obtain a tax organising the provision of returns and other information to
advantage. the IRD; and
providing the Manager any information concerning you that
Impact of PIE taxation for certain taxpayers may be relevant to whether the Fund continues to meet the
In some circumstances your personal marginal tax rate could be eligibility requirements for a PIE (such as the Maximum
lower than your PIR. In this event investing through a PIE may not Investor Interests requirement and the Minimum Number Of
be appropriate. Investors requirement).
In addition, investing in the Funds through KB Custodial (as proxy) This is because KB Custodial holds your Units on your behalf, as a
may not be appropriate if you are a non-resident in New Zealand custodian and proxy for you.
for tax purposes. This is because New Zealand tax will be imposed
on income attributed by the Funds to you at 28%, which may be
13Proxies A Fund that holds foreign shares (that is, shares in any company
If you are investing through us as a proxy you will be required not resident in New Zealand) are subject to the foreign investment
to carry out the responsibilities set out above for the underlying fund rules and the FDR (fair dividend rate) method is used in
investors you are responsible for and may be required to enter into respect of such shares, except for shares in certain Australian
contractual arrangements with us and KB Custodial regarding your resident companies listed on an approved ASX index (taxed under
compliance with the requirements of tax legislation. You will be ordinary New Zealand tax rules) and certain “non ordinary”
liable to pay KB Custodial an amount equal to any losses liabilities, shares (which are instead subject to the CV (Comparative Value)
costs or expenses incurred by KB Custodial, the Manager and the method). Under the FDR method, a Fund that holds foreign shares
Trustee as a result of any breach (in relation to underlying investors is deemed to derive taxable income equal to 5% of the market
that you are responsible for) of the Maximum Investor Interests value of the shares, calculated on a daily basis and weighted over
requirement or the Minimum Number of Investors requirement the income year. Dividends and gains received on such shares are
under the Income Tax Act 2007 including the losses, liabilities not taxable and losses incurred on the disposal of such shares
costs or expenses arising from any Fund losing PIE status. are not deductible when the FDR method is applied. Where the
CV method is applied (see above) changes in the value of an
Other investment over the income year (including those due to foreign
exchange movements) are included in the Fund’s income, together
Tax legislation and rates of tax are subject to change. The impact
with amounts received during the income year from holding or
of taxation may vary depending on your individual circumstances.
disposing of the investment.
It is important to seek professional taxation advice before you
The FDR foreign currency hedges tax calculation method has
invest or deal with your investment in any way as the taxation
been introduced for foreign currency hedges relating to shares
treatment of your investment will be specific to your circumstances
which are taxed under the FDR method or are listed on the ASX.
and to the nature of your investment.
The application of this calculation method is optional. Under this
None of the Trustee or its nominee companies, the Manager, calculation a form of the FDR method is applied to the foreign
the Promoters, the Investment Manager, Kiwibank, Kiwibank currency hedges instead of the financial arrangement rules. The
Investment Management, KB Custodial, New Zealand Post Limited adoption of the foreign currency hedges tax calculation method is
or any other member of the New Zealand Post Group, any of their currently being considered and may or may not be implemented
respective related companies or directors, or any other person in the future on a Fund by Fund basis, as appropriate. The current
takes responsibility for your taxation liability. treatment of foreign currency hedges will continue where FDR
If you receive a request from us or KB Custodial to provide foreign currency hedges method cannot be applied or is not
information to enable the Manager to determine whether any Fund adopted.
continues to meet the PIE eligibility requirements you must supply
that information within 30 days of the request. Switches and redemptions
If you switch from one Fund to another Fund or redeem Units,
The Manager has a wide range of discretions to operate each Fund
the tax liability at your PIR on income attributed to you up to
as a PIE including:
the switch or redemption will need to be satisfied, either by
discretions relating to the calculation of tax; cancellation of Units or deductions from distributions, if any.
adjusting distributions to you or redeeming your Units to meet If you hold your Units through KB Custodial on capital account
your liability for tax; and (i.e., if you would not be taxed on a transfer of the Units), then the
taking all steps necessary to ensure that the Fund meets the entire amount of any Unit redemption proceeds will not be taxable
PIE eligibility requirements including: for you. If you hold your Units through KB Custodial on revenue
account (i.e., if you would be taxed on a transfer of the Units),
–– rejecting applications for Units and transfers of Units to then you should obtain professional taxation advice as to whether
ensure the Maximum Investor Interests requirement under redemption proceeds will be taxable for you.
the Income Tax Act 2007 is not exceeded; or
–– if your unit holding exceeds the Maximum Investor Transfers
Interests requirement, selling, redeeming or repurchasing As the Funds are PIEs, applications for the transfer of Units may be
Units. You will be given notice and an opportunity to treated as a cancellation of the transferor’s Units and the issue of
remedy a breach of the Maximum Investor Interests new Units to the transferee (in which case the entry and exit fees
requirement (provided that there is time to remedy the set out on page 16 may be payable). Also, tax at the transferor’s
breach under the relevant tax legislation). The proceeds PIR may be payable on income attributed to the transferor for the
from any sale, redemption or repurchase carried out by period up to the date of cancellation of the Units. If a transfer of
the Manager to remedy such a breach (less any costs Units does occur there may be tax consequences for the transferor,
and expenses incurred by the Manager in respect of the depending on the transferor’s tax position.
same) will be paid to you, and neither the Manager nor
the Trustee shall be liable for any loss you may incur
under or in connection with any such sale, redemption or
repurchase.
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