Fisher Funds LifeSaver Plan INVESTMENT STATEMENT & APPLICATION FORM

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1 Fisher Funds LifeSaver Plan INVESTMENT STATEMENT & APPLICATION FORM DATED AND PREPARED AS AT 13 APRIL 2015

2 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: What sort of investment is this? 20 Who is involved in providing it for me? 21 How much do I pay? 22 What are the charges? 23 What returns will I get? 26 What are my risks? 30 Can the investment be altered? 34 How do I cash in my investment? 34 Who do I contact with inquiries about my 37 investment? Is there anyone to whom I can complain if I have problems with the investment? What other information can I obtain about this investment? 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 When seeking or receiving financial advice, you should check the type of adviser you are dealing with: the services the adviser can provide you with: the products the adviser can advise you on. A financial adviser who provides you with personalised financial adviser services may be required to give you a disclosure statement covering these and other matters. You should ask your adviser about how he or she is paid and any conflicts of interest he or she may have. 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. This is an Investment Statement for the purposes of the Securities Act Joining the Fisher Funds LifeSaver Plan There are two types of membership in the Fisher Funds LifeSaver Plan (LifeSaver): Individual Investors who can apply to join independently of a workplace superannuation scheme (referred to in this Investment Statement as Individual Investors) and investors who can join through their Employer s LifeSaver scheme (referred to in this Investment Statement as Employee Investors). To the extent that this Investment Statement relates to the offer to Employee Investors, this Investment Statement is prepared in accordance with the requirements of the Securities Act (Multiple Participants Superannuation Schemes) Exemption Notice If you are investing in LifeSaver through your Employer s LifeSaver scheme you must read the accompanying Supplement that forms part of this Investment Statement then complete the Application Form included with this Investment Statement. Refer to page 20 for further details. 2

3 Retirement saving made simple Welcome to LifeSaver Thank you for taking the time to learn more about LifeSaver. Investment decisions should not be taken lightly and we have designed this Investment Statement and our other resource materials to make your decision as easy as possible. Retirement saving made simple LifeSaver provides a range of personal superannuation funds designed to help discerning Kiwis to save their hard-earned wealth for retirement. You will benefit from flexible contribution options, a comprehensive choice of investment funds to suit your own investment goals and risk tolerance, and an intuitive range of online tools to help manage your account. Fisher Funds 100% Kiwi Fisher Funds is a specialist New Zealand owned investment manager established in Our objective is straightforward to grow the value of your savings to help you achieve your desired retirement lifestyle. Our investment team is one of the largest and most experienced in New Zealand with more than 200 years combined investing experience. Today, Fisher Funds is proudly the largest 100% New Zealand owned and operated fund manager investing over $5 billion on behalf of more than 250,000 New Zealanders. You can also take confidence that an independent trustee holds your savings separately on your behalf. We re always here to help you If you re new to the world of retirement saving and superannuation funds, or have any questions arising from reading this Investment Statement, please call or one of our LifeSaver experts who will be happy to help. LifeSaver is about your future. We would be honoured to share your financial journey with you. We promise to make LifeSaver easy from the day you join until long after you retire. Carmel Fisher Managing Director 3

4 Key Information Summary Key terms What is LifeSaver? Who can join LifeSaver? What are the benefits? When can I withdraw my money from LifeSaver? Who is the provider of LifeSaver? What funds can I invest in? Description LifeSaver is a superannuation scheme that has been designed to help you to grow a retirement fund that can help secure the lifestyle you would like to enjoy in later years. New membership in LifeSaver is open to natural persons who: are New Zealand residents; and are over 18 years of age; and meet the eligibility criteria to join their Employer s LifeSaver scheme (if applicable). LifeSaver has been established to help you save for your retirement. Some people achieve this by locking away their retirement savings until they reach a specified age. You can decide to lock in all or part of your LifeSaver investment until you reach age 50 or older. If you join LifeSaver as part of your Employer s LifeSaver scheme, or have agreed Employer contributions separately with your Employer, your Employer may also make contributions to your account. In relation to Employee Investors: Subject to any Locked-in Interest, retirement, resignation, redundancy and ill health benefits will be payable upon ceasing employment. In some circumstances you may be able to elect insurance cover. If this is made available to you the details will be included in the Supplement. Some Employers will pay certain fees instead of these being charged to your account. If this is the case, the details will be included in the Supplement. Employee Investors will need to read the Supplement to determine the circumstances under which benefits are payable or withdrawals can be made. Individual Investors are able to make withdrawals at any time, subject to any lock in requirements, meeting minimum withdrawal amounts and maximum withdrawal frequency requirements. You can also use LifeSaver to manage your nest egg after you retire. Generally, you can take out lump sums, set-up a regular payment to your bank account or just leave your savings to accumulate until you need them. Fisher Funds Management Limited (Fisher Funds) is the Administration Manager, Investment Manager and Promoter of LifeSaver. Trustees Executors Limited (TEL) is the Trustee and Issuer of LifeSaver. LifeSaver has a total of seven investment funds. Individual Investors have access to all seven investment funds. Employee Investors have access to the investment funds specified in the Supplement. The seven investment funds are: Preservation Fund; Conservative Fund; Growth Fund; Trans Tasman Equity Fund; New Zealand Fixed Income Fund; Balanced Fund; Equity Fund; and each an investment fund, and together the investment funds. You can invest in one or more of the investment funds in any proportion that you wish, or you can select from six investment strategies (a carefully designed investment mix to fit a specific investor profile). For more information See page 20 See page 20 See pages 20 and 26 to 28 See pages 26 and 34 to 36 See pages 21 and 22 See pages 10 to 17 4

5 Key terms How much do I have to pay? What are the risks? What are the charges? Does anyone guarantee the investment? Who can I contact for further information? Further information If you are an Employee Investor, you are required to contribute a minimum amount as specified in the Supplement from your after-tax salary or wages. You can reduce, suspend or terminate your contributions by giving written notice to your Employer. If you are an Individual Investor, you can choose the amount that you contribute. There is currently no minimum contribution requirement. You can choose to make regular contributions or lump sum payments at any time. If you are an Individual Investor, you will need to maintain a minimum balance in your account. If you are an Employee Investor, you will need to comply with any requirements of your Employer s LifeSaver scheme (if applicable). All investments involve a degree of risk. The potential return on an investment is generally related to the risk of the investment. The key factor that determines your returns is the investment performance of the investment funds you are invested in. The performance of an investment fund is determined by the investment fund s asset allocation. Generally, investment funds that are invested in a higher proportion of growth assets will have the potential for higher returns in the long term but experience more volatility. Investment funds that are invested in a higher proportion of income assets will have lower potential returns but have less volatility and therefore have less risk attached to them. Each investment fund is charged a management fee which is deducted from the assets of the investment fund and paid to us. Trustee fees and expenses may also be deducted from your account and paid to the Trustee. An administration fee may also be deducted from your account and paid to the Trustee who then pays it to the Administration Manager. You may also be charged an entry fee, service fee or contribution fee. In respect of Individual Investors, the fee is agreed between you and your financial adviser and paid as commission. If you are an Employee Investor, you will need to refer to the Supplement to determine how the fees and expenses described above are charged. Each investment fund may invest in other funds which may charge fees and incur expenses. The Trust Deed limits the maximum amount of Trustee and investment management fees, and costs associated with investment management to 1.5% per annum of the gross assets of an Employer s LifeSaver scheme or an Individual Investor s account. The limit does not apply to other fees and expenses such as administration fees, brokerage, printing and postage and the cost of insurance. None of Fisher Funds, the Trustee, or any other person or company, guarantees or promises the repayment of, or returns on, investments in LifeSaver. You can check the balance of your account, obtain information and check your membership details through If you have any questions about your account, you can contact your financial adviser (if you have one), us at lifesaver@fisherfunds.co.nz, call us on 0508 FISHER ( ) or write to us at our address. For more information See pages 22 and 23 See pages 30 to 33 See pages 23 to 25 See page 22 See page 37 5

6 What is the purpose of this document? This document provides information about personal superannuation and explains how LifeSaver, as part of an overall retirement savings plan, can help you achieve your retirement goals. It begins by explaining how LifeSaver works and the options that you have. The back part of the document contains information that must be provided to you by law. If you do decide to join LifeSaver, the Application Form is on page 41. Once we receive your first contribution, we ll send you confirmation of your enrolment. Why choose personal superannuation? Living off New Zealand Superannuation Most of us are likely to live for many years in retirement. If you don t have a savings plan you could end up having to rely on NZ Superannuation alone, and that may not be easy as the graph below indicates. Comparing your current income vs NZ Super income at retirement Weekly Net Income $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $653 $942 $1,334 $ $40k Salary $60K Salary $90k Salary NZ Super Without saving, could you afford to live the lifestyle you want in retirement? This graph is based on a single person living alone from the age of entitlement to NZ Super, currently age 65. The weekly net income amounts for each salary level are based on the current applicable personal tax rates. To live the lifestyle you want in retirement whether it s owning your own home, travelling the world, or creating a better future for you and your family you ll probably need extra savings to do it. LifeSaver can help you get there. Adequate retirement savings and income Most people prefer to have more funds on hand in their retirement than NZ Superannuation will provide. It makes sense to set aside some income earned today, or postpone spending an inheritance, redundancy payout or windfall, in order to save it for future use. A personal superannuation fund is an excellent option to save for retirement. The investment process is simple. You can choose a fund that matches your personal goals, needs, objectives, and tolerance for investment risk. You should consult an AFA before making any decisions to invest. With personal superannuation, you can accumulate a nest egg during your working life so that you can withdraw extra income to supplement NZ Superannuation, once you are retired. Sign up now! Choosing to invest in personal superannuation is ultimately a decision about the comfort and quality of life you want in retirement. If you want to be able to afford more of the things you enjoy once you are retired, there s no better time to start saving than right now. The sooner you begin your retirement savings, the more likely you will have saved up enough for the day you retire. 6

7 Need help? There s a lot of information in this document and it s not unusual to want clarification at different points. If you decide that you need an explanation on anything that you read here, please talk to an Authorised Financial Adviser (AFA) or call our Client Services team, who will be pleased to help you. Calls are free and this service is available from 8.30am to 5.00pm week days. Contact us: Call 0508 FISHER ( ) Visit our website at lifesaver@fisherfunds.co.nz Why invest with Fisher Funds? Fisher Funds was established in 1998 with two goals in mind. Firstly, we wanted to deliver great investment performance by investing in good quality companies. Our second goal was to demystify investing and make it enjoyable, understandable and profitable for New Zealand investors. Our commitment to these goals has not wavered over time and in fact, we are more passionate than ever about delivering a successful investing experience to our clients. We are a specialist investment manager Investing is all we do. We channel all our efforts into achieving great investment returns. An experienced, respected team Our 15 strong investment team is one of New Zealand s largest and collectively has more than 200 years investing experience in New Zealand and around the world. Our approach ensures that you benefit from experienced, informed decision making by seasoned professionals. Biographies of our investment team are available at We are Kiwis like you We are a 100% New Zealand owned and operated company, managing over $5 billion for more than 250,000 New Zealanders. Friendly, helpful service every step of the way We focus on getting the basics right. When you invest with Fisher Funds and LifeSaver, we will not lose you in a large, impersonal database or call centre. We are different because of the personalised service that we offer you. When you call us you will always talk to a real person and our whole team is accessible and directly available to you. Financial advice We can provide you with suitable advice at no cost to help you choose the right investment strategy for your circumstances, whether it is when you join or later on. Candid communication Since our establishment in 1998 we have developed a reputation for open and honest communication. We ve found that investors appreciate knowing where their money is invested and why. Our regular and candid communication ensures that you keep in touch with your savings and your future. 7

8 Information on how your LifeSaver savings are invested Your investment options LifeSaver has seven investment funds, each with a different risk versus return profile based on the mix of assets they are invested in. You can build your own investment strategy by investing in the investment funds of your choice or consult an AFA to help you choose. The investment funds invest in various different asset classes such as cash, fixed interest, commercial property, shares and alternative investments depending on the Statement of Investment Policy and Objectives (SIPO) for each investment fund. Broadly speaking, the asset classes which the investment funds invest in can be categorised as being either income or growth assets. Growth assets are those which tend to give higher returns over the long term but experience more volatility (movements up or down in the value of your investment) than income assets in the short term. The mix of income and growth assets therefore determines the risk versus return profile of the investment funds. Note: Short term refers to up to three years, medium term refers to three to seven years and long term refers to over seven years. Income assets Income assets aim to provide investors with more stable returns primarily sourced from interest payments. In some cases capital gains may be received as well. Income assets are generally considered to be lower risk than growth assets, however there is still a potential for capital losses. Income assets include: Cash Short-term, easily sold interest-bearing investments. All investments will have less than 180 days to maturity and may include government bills, bank bills, bank certificates of deposit and short-term debt securities issued by corporate businesses or local authorities. Cash is the lowest risk, most conservative asset class, but generally provides lower returns than the other asset classes. Fixed interest Medium-term to longer-term fixed interest-bearing investments e.g. bonds issued by governments or their agencies and medium-term and long-term debt securities issued by corporate businesses or local authorities. Some capital gains may also be achieved if the fixed interest securities increase in market value. There is also the potential for capital losses to be incurred if the fixed interest securities decrease in market value. Fixed interest is higher risk than cash because of the longer-term commitment of funds, but higher returns than those from cash are generally expected. Fixed interest assets can be sourced locally or from overseas. Growth assets Returns from growth assets are primarily sourced from capital gains, but may also pay income from rentals or dividends received. Growth assets are generally considered to be higher risk than income assets with the potential for capital losses being greater than with income assets. 8

9 Growth assets include: Commercial property Real estate used for business purposes and broadly classified as retail, industrial or office and general. Income is received from commercial tenant rentals and capital gains may arise from increases in the market value of the property. There is also the potential for capital losses if the market value of the property declines. Commercial property is higher risk than cash or fixed interest, but is generally expected to provide better longer-term returns. Shares Shares in companies that are usually traded on share markets both locally and overseas (also called equities). Capital gains may be generated through shares when their share price increases. In addition, income may also be received from dividends paid by the companies. There is the potential for capital losses if shares decrease in value. Shares have higher risk than cash, fixed interest or commercial property, and can fluctuate significantly in value, but are generally expected to provide greater returns over the longer term. Alternative investments Alternative investments refer to a broad range of assets that do not fall within the main asset classes referred to above. Alternative investments are diverse, with generally higher risk and greater potential return characteristics than the main asset classes. Derivatives Derivatives can be used as an alternative to physical assets or as a risk management tool. There are many types of Derivatives and we generally use them to gain exposure to the underlying assets (they will have a similar risk to the underlying assets), to hedge currency exposure, or to reduce risk in the portfolio. Derivatives are not used as a speculative tool to generate returns. Diversification Diversification is the strategy of spreading your money amongst a number of different investments to reduce your risk. If you own a number of different investments and one performs poorly, your portfolio won t be affected as much as if you just owned the poor performer. Diversification is not just about the number of different investments you own it s also about the type of investments. If they are all similar investments that are impacted by the same things, then having a number of them doesn t necessarily protect your portfolio. Diversification reduces the volatility of a portfolio, and allows for more consistent performance under a wide range of economic conditions. A diversified portfolio is described as conservative if it holds significantly more income assets (cash, fixed interest) than growth assets (commercial property, shares, alternative investments), and growth if it contains significantly more growth assets than income assets. Conservative portfolios aim for lower volatility with less focus on returns, whereas growth portfolios aim to achieve higher returns, but experience more volatility and therefore have more risk attached to them. 9

10 Your investment options We provide a choice of investment options for you. You can build your own investment strategy by choosing to invest in one or more of the seven investment funds available in LifeSaver or, if you are a member of your Employer s LifeSaver scheme, the investment funds specified by them (please see the Supplement). If you do not choose an investment fund or funds, then your contributions will be invested in the Balanced Fund, or if you are a member of your Employer s LifeSaver scheme, the investment fund specified by them (please see the Supplement). You can invest in any of the investment funds in any proportion that you wish. Additional information for Employee Investors The investment funds that have been made available to you by your Employer are outlined in the Supplement under the heading Your choice of investment. Not all of the investment funds described below may be available to you. 10 New Zealand Cash 75% New Zealand Fixed Interest 25% Preservation Fund Risk versus return profile: Investment type: Low Cash and fixed interest fund Investment objective: To provide capital protection while providing a return that exceeds the ANZ 90 Day Bank Bill Index over the long term. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to primarily cash and short term New Zealand securities such as 90 day bank bills, with a total portfolio duration not exceeding six months. Derivatives may also be held by the Preservation Fund. In future the Preservation Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Preservation Fund is designed for a very short term or extremely cautious investor who is nearing retirement age and/or who intends on making a withdrawal in the next twelve months. It also suits an investor who is primarily concerned with maintaining the capital value of their investment. In exchange, they are prepared to accept the likelihood of lower returns.

11 New Zealand Fixed Interest 100% New Zealand Cash 28.0% New Zealand Fixed Interest 17.0% International Fixed Interest 25.0% Direct Property 10.0% Trans Tasman Shares 8.0% International Shares 12.0% New Zealand Cash 17.0% New Zealand Fixed Interest 10.0% International Fixed Interest 16.0% Direct Property 10.0% Trans Tasman Shares 19.0% International Shares 28.0% New Zealand Fixed Income Fund Risk versus return profile: Investment type: Low-medium New Zealand fixed interest fund Investment objective: To provide a return that exceeds the return from the ANZ New Zealand Government Stock Index over the long term. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to primarily high grade fixed interest securities in New Zealand. Derivatives may also be held by the New Zealand Fixed Income Fund. In future the New Zealand Fixed Income Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The New Zealand Fixed Income Fund is designed for a short term investor or naturally cautious investor who is nearing retirement age and/or intends making a withdrawal in the short term. It also suits an investor whose priority is to maintain the capital value of their investment and who wants to invest in only income assets. In exchange, they are prepared to accept the likelihood of lower returns. Conservative Fund Risk versus return profile: Investment type: Balanced Fund Risk/return profile: Investment type: Low-medium Conservative diversified fund Investment objective: Predominantly to provide capital protection, while also generating a modest level of capital growth over the long term. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to primarily income assets (cash and fixed interest), with a limited exposure to growth assets (property and trans tasman and international shares), and at our discretion, alternative assets and Derivatives. In future the Conservative Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Conservative Fund is designed for a short term or naturally cautious investor who is nearing retirement age and/or intends making a withdrawal in the short term. It also suits an investor who is primarily concerned with maintaining the capital value of their investment. In exchange, they are prepared to accept the likelihood of lower returns. Medium Balanced diversified fund Investment objective: To achieve moderate long term capital growth with a focus on capital protection. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to a range of growth assets (property and trans tasman and international shares) and income assets (fixed interest and cash), and at our discretion, alternative assets and Derivatives. In future the Balanced Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Balanced Fund is designed for an investor who wants to achieve a balance between maintaining the capital value of their investment and growing that investment over the medium to long term. It also suits an investor who wants to split their investments more evenly between growth and income assets (even in the short term). 11

12 New Zealand Cash 15.0% New Zealand Fixed Interest 2.5% International Fixed Interest 3.5% Direct Property 9.0% Trans Tasman Shares 28.0% International Shares 42.0% Growth Fund Risk versus return profile: Investment type: Medium-high Growth diversified fund Investment objective: To focus predominantly on capital growth over the long term. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure predominantly to a range of growth assets (property and trans tasman and international shares) and limited exposure to income assets (fixed interest and cash), and at our discretion, alternative assets and Derivatives. In future the Growth Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Growth Fund is designed for a long-term investor who wants good growth potential and is willing to accept a fair amount of positive and negative fluctuations in the short term in anticipation of achieving higher returns in the long term. This type of investor also has time to wait for the value of their investment to recover if it goes down. New Zealand Cash 2.0% Trans Tasman Shares 39.0% International Shares 59.0% Equity Fund Risk versus return profile: Investment type: High Share fund Investment objective: To provide significant capital growth over the long term by investing in shares. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to a range of trans tasman and international shares. The Equity Fund may also invest in alternative assets and Derivatives. In future the Equity Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Equity Fund is designed for a long-term investor who is willing to accept positive and negative fluctuations in the short term in anticipation of achieving higher returns in the long term. It is designed for an investor who has time to wait for the value of their investment to recover if their investment goes down and who wants to invest solely in shares. 12 New Zealand Shares 70% Australian Shares 30% Trans Tasman Equity Fund Risk versus return profile: Investment type: High Trans tasman share fund Investment objective: To provide significant capital growth over the long term by investing in trans tasman shares. Investment policy: As at the date of this investment statement, to invest in other managed funds that provide exposure to a diversified portfolio of New Zealand and/ or Australian shares. Derivatives may also be held by the Trans Tasman Equity Fund. In future the Trans Tasman Equity Fund may invest in some of these assets directly, at our discretion. Who is the Fund suitable for? The Trans Tasman Equity Fund is designed for a long-term investor who is willing to accept positive and negative fluctuations in the short term in anticipation of achieving higher returns in the long term. It is designed for an investor who has time to wait for the value of their investment to recover if their investment goes down and who wants to invest solely in shares that are concentrated in New Zealand and/or Australia.

13 Investment Tip The longer your investment timeframe, the more you may be comfortable with an investment strategy that consists of more growth assets. We think growth assets are important, as most LifeSaver members have a long time to save for their retirement. Historically, investing in growth assets has produced better long-term investment returns than conservative assets, minimising the impact of inflation over time. However, if you are nearing retirement or saving for your first home, you may want to have a more conservative investment approach. Income assets such as cash and fixed interest typically produce more stable returns in the short term. You are not locked into an investment strategy for life. If your situation or thinking changes, you can change your investment strategy at no cost. Choose your own investment strategy You can opt for one of our six investment strategies (a carefully designed investment mix to fit a specific investor profile) by completing the questionnaire on pages 14 and 15 where an investment strategy will be suggested for you. These are: Preservation Strategy (100% Preservation Fund) Conservative Strategy (100% Conservative Fund) Conservative Balanced Strategy (50% Conservative Fund, 50% Balanced Fund) Balanced Strategy (100% Balanced Fund) Balanced Growth Strategy (40% Balanced Fund, 60% Growth Fund) Growth Equity Strategy (40% Growth Fund, 60% Equity Fund). One of the most important decisions to make when joining LifeSaver is how you want your savings to be invested. You might not have the skills or experience to manage investments (that is what we do for you) but it is in your best interests to tell us which investment strategy you prefer so that we can manage your savings appropriately. We understand that every investor has different investment goals (and timeframes in which to achieve these) and that investors have varying appetites for risk. We have developed LifeSaver to allow you to select the investment strategy that you consider meets your needs. Important consideration when choosing your investment strategy Before choosing your investment strategy it is important that you think about: your investment timeframe (how long you will be saving before you take out money for your retirement); and your risk tolerance (how comfortable you are with the value of your savings fluctuating). Additional information for Employee Investors Investors who are joining LifeSaver through their Employer s LifeSaver scheme can only select those investment funds that are available to them, as listed in the Supplement. If your Employer offers the Preservation, Conservative, Balanced, Growth and Equity investment funds, then the investment strategies are available to you. If your Employer does not offer all five of these investment funds, the investment strategies are not available to you. 13

14 Investor Profile Questionnaire The following questionnaire may help you decide which investment strategy could suit you best. If you require any assistance, contact us on 0508 FISHER ( ). This questionnaire is a guide only, containing information of a general nature. It is not personalised financial advice and does not take into account your particular situation or goals. Section 1: Your Investment Timeframe Question 1: How many years will you be saving before you take out money for your retirement? Investment Timeframe: Section 2: Your Risk Tolerance Circle each answer and note the total score for this section at the end. Question 2: Which of the following best describes your attitude to investment risk? year/s Score I am a very low risk taker 1 I am a low risk taker 2 I am an average risk taker 3 I am a high risk taker 4 I am a very high risk taker 5 Question 4: I am willing to accept more risk to possibly achieve higher returns. Score Strongly disagree 1 Disagree 2 Neutral 3 Agree 4 Strongly agree 5 Question 5: If the value of my investment fluctuated up or down more than 10% over a short time frame it would make me very nervous. Score Strongly agree 1 Agree 2 Neutral 3 Disagree 4 Strongly disagree 5 Question 3: Which of the following statements best describes your understanding of the financial markets and investments? I am only familiar with bank term deposits and savings accounts I know a little about investments outside bank term deposits and savings accounts but not enough to make an informed decision on how to invest I understand different types of investments have different levels of risk and the degree of risk is relevant to the possibility of fluctuation in value I understand all types of investments (including shares and property) and understand the various influences on their returns I am very experienced with all types of investments and consider myself well educated when it comes to risk versus reward and the opportunities available Score Question 6: I am willing to experience the ups and downs (fluctuations) of the market for the potential of greater returns over the long term. Strongly disagree 1 Disagree 2 Neutral 3 Agree 4 Strongly agree 5 Question 7: My main concern is protection of my capital. Keeping my money protected is more important than earning higher returns. Score Score Strongly agree 1 Agree 2 Neutral 3 Disagree 4 Strongly disagree 5 14

15 Question 8: If I consider current term deposit rates, the overall level of return that I reasonably expect to achieve from my Fisher Funds investments over the period I wish to invest is: Score Term deposit returns with minimal risk 1 of losing any capital Term deposit returns + 1% 2 Term deposit returns + 3% 3 Term deposit returns + 5% 4 Term deposit returns + > 5% 5 Question 9: After I have made a significant financial decision, I normally feel: Very concerned 1 Concerned 2 A little uneasy 3 Content I have made the right decision 4 Optimistic that the decision I have made will 5 provide significant benefits Add your scores together for questions 2 to 9 and see below for details. Score Risk Tolerance Score: How did you score? The table below uses your scores from the questionnaire to determine your investment strategy. Step 1 Find your Timeframe across the top (using your score from section 1). Step 2 Find your Risk Tolerance score along the left side (using your score from section 2). Step 3 Where they intersect is your suggested investment strategy. Step 4 Read the descriptions of each investment strategy on pages 16 and 17 to ensure you are comfortable with your investment strategy. Step 5 Complete the Application Form at the back of this investment statement, ticking the box for your suggested strategy. 0-8 Your Investment Timeframe (years) < Your Risk Tolerance Score Preservation Conservative Conservative Balanced Balanced Balanced Growth Growth Equity The scores are designed to provide an indication only of what might be the most suitable investment strategy for you. Before making a choice, you should consider all factors relevant to your decision. You are not limited to these six options you can build your own investment strategy by choosing a mix of investment funds in any proportions you wish. Remember that you are responsible for choosing an investment strategy neither Fisher Funds nor the Trustee is responsible for the choice you make. 15

16 Investment Strategy Indicative Asset Mix* Suitable for investors... Investment fund(s) that make(s) up this strategy Preservation Very Low Risk / Return 100% income The Preservation Strategy is designed for a very short term or an extremely cautious investor who: is nearing retirement age and intends on making a withdrawal; or is primarily concerned with maintaining the capital value of their investment. In exchange, they are prepared to accept the likelihood of lower returns. 100% Preservation Fund New Zealand Cash 75% New Zealand Fixed Interest 25% Conservative Low Risk / Return 70% income 30% growth New Zealand Cash 28.0% New Zealand Fixed Interest 17.0% International Fixed Interest 25.0% Direct Property 10.0% Trans Tasman Shares 8.0% International Shares 12.0% The Conservative Strategy is designed for a short term or a naturally cautious investor who: is nearing retirement age and intends on making a withdrawal; or is primarily concerned with maintaining the capital value of their investment. In exchange, they are prepared to accept the likelihood of lower returns. While this investment strategy is designed to be conservative, the value of your investment may go down as well as up. 100% Conservative Fund Conservative Balanced Low to Medium Risk / Return 56.5% income 43.5% growth New Zealand Cash 22.5% New Zealand Fixed Interest 13.5% International Fixed Interest 20.5% Direct Property 10.0% Trans Tasman Shares 13.5% International Shares 20.0% The Conservative Balanced Strategy is designed for a short to medium term or a cautious investor who: is approaching retirement age and intends on making a withdrawal in the medium term; or wants to keep their investment relatively low risk but is also interested in returns; this type of investor is cautious but realises that some risk may be necessary. 50% Conservative Fund / 50% Balanced Fund 16

17 Investment Strategy Indicative Asset Mix* Suitable for investors... Investment fund(s) that make(s) up this strategy Balanced Medium Risk / Return 43% income 57% growth New Zealand Cash 17.0% New Zealand Fixed Interest 10.0% International Fixed Interest 16.0% Direct Property 10.0% Trans Tasman Shares 19.0% International Shares 28.0% The Balanced Strategy is designed for an investor who: wants to achieve a balance between maintaining the capital value of their investment and growing that investment over the medium to long term; or wants to split their investments more evenly between growth and income assets (even in the short term). 100% Balanced Fund Balanced Growth Medium to High Risk / Return 30% income 70% growth New Zealand Cash 15.8% New Zealand Fixed Interest 5.5% International Fixed Interest 8.5% Direct Property 9.4% Trans Tasman Shares 24.4% International Shares 36.4% The Balanced Growth Strategy is designed for a long term investor who: wants good growth potential and is willing to accept a fair amount of positive and negative fluctuations but not as much as a portfolio invested primarily in growth assets; and has time to wait for the value of their investment to recover if it goes down. 40% Balanced Fund / 60% Growth Fund Growth Equity High Risk / Return 10% income 90% growth New Zealand Cash 7.2% New Zealand Fixed Interest 1.0% International Fixed Interest 1.4% Direct Property 3.6% Trans Tasman Shares 34.6% International Shares 52.2% The Growth Equity Strategy is designed for a long term investor who: is willing to accept positive and negative fluctuations in the value of their investment in the short term in anticipation of achieving higher returns in the long run; and has time to wait for the value of their investment to recover if it goes down. 40% Growth Fund / 60% Equity Fund We know that life is forever changing and that we must change with it. We recommend that you review your choice periodically, especially if there are significant changes to your financial situation. This may require you to complete this questionnaire again. You can change your investment option at any time. * The pie charts shown detail the respective long term target asset allocations of the investment funds and strategies as at the date of this investment statement. Those asset allocations may change over time. 17

18 18 Asset classes and allocations The investment funds may gain exposure to the asset classes described in the diagrams on pages 10 to 12 directly (by buying the assets), indirectly (by investing in other managed funds which hold the assets, including other funds managed by Fisher Funds) or artificially (by purchasing Derivatives). As at the date of this Investment Statement, Fisher Funds has chosen to gain investment exposure to international fixed interest investments for the: Conservative Fund and Growth Fund through investment in Underlying funds which hold a segregated pool of assets of which Pacific Investment Management Company LLC (PIMCO) is the investment manager, as well as a further segregated pool of assets of which Wellington International Management Company Pte Ltd (Wellington) is the investment manager, however this may change in the future, and some international fixed interest assets may be held directly. Balanced Fund through investment in Underlying funds which invest in the PIMCO Cayman Global Bond (NZD Hedged) Fund, a managed fund of which PIMCO is the investment manager, and a segregated pool of assets of which Wellington is the investment manager, however it is intended that in future the Balanced Fund will gain exposure as above. As at the date of this Investment Statement, both PIMCO and Wellington undertake foreign currency hedging on the international fixed interest investments they respectively manage in relation to the Conservative Fund, Balanced Fund and Growth Fund, however we may take over some or all of the currency hedging in the future without notification to you. As at the date of this Investment Statement, Fisher Funds has chosen to gain investment exposure to emerging market shares for the Conservative Fund, Balanced Fund, Growth Fund, and Equity Fund through investment in an Underlying fund which invests in the PFS Somerset Emerging Markets Dividend Growth Fund, a managed fund of which Somerset Capital Management LLP is the investment manager, however this may change in the future without notice to you. Asset specific risks Each asset class in which an investment fund invests has specific risks. The main risks associated with each asset class are: Cash: the main risk is inflation risk the value of an investment fund s cash assets not keeping pace with inflation (meaning that though the assets steadily grow in value their purchasing power reduces over time). The value of cash assets can also be affected by credit risk a borrower or other counterparty being unable to pay interest or repay a loan; Fixed Interest: the main risk is interest rate risk - a fixed interest asset may become more or less valuable depending upon changes in market interest rates (if these rise, the asset becomes less valuable). The value of fixed interest assets can also be affected by credit risk in the same way as cash assets. Another key risk with international fixed interest assets is currency risk; Shares: the main risk is market risk - the value of an investment fund s share assets will be affected by the economic performance of a particular company or sector and general market performance. Another key risk with international share assets is currency risk; and Property: the main risk is market risk the value of an investment fund s property assets will be affected by factors such as demand (generally for property or for the location), the general economy, market sentiment and movements in interest rates. Another key risk is liquidity risk - the property market generally has greater liquidity risk than the share market. The relative significance of these specific risks will be affected by an Investment Fund s asset allocations from time to time. Please refer to the section headed What are my risks? on page 30 for more information on the risks referred to above and for information on other risks that apply to the investment funds. Fisher Funds may invest directly (by buying the assets), indirectly (by investing in other managed funds which hold the assets, including other funds managed by Fisher Funds) or artificially (by purchasing Derivatives), and changes may be made without notice to you. For more information please visit lifesaver or contact us on 0508 FISHER ( ). While the asset allocations of each investment fund will, over the long-term, target the levels for the investment funds as shown in the diagrams on pages 10 to 12, the actual asset allocations will vary from time to time. Such variations may be due to market movements or due to us (or the manager of the Underlying funds) varying the allocations away from the target levels for a variety of reasons, including managing risk, increasing potential returns or managing cashflow requirements. Any variation away from the target asset allocation levels must remain within a permitted range. Alternative investments The Conservative Fund, the Balanced Fund and the Growth Fund may also have exposure, either directly or indirectly, to alternative investments from time to time. While the target asset allocation level for alternative investments for each of these investment funds is currently 0%, the Conservative Fund and the Balanced Fund may each invest up to 10% of their value and the Growth Fund may invest up to 15% of its value in alternative assets. Alternative investments are discussed further on page 9. Hedging of foreign currency The Conservative Fund, Balanced Fund, Growth Fund, Equity Fund, and from time to time, the Trans Tasman Equity Fund, invest in asset classes that are denominated in foreign currencies. To reduce the risk of adverse currency fluctuations, foreign currency hedging is undertaken. International fixed interest assets (bonds) are usually fully offset against the New Zealand dollar. International shares may be offset to some degree against the New Zealand dollar, however we or the manager of the relevant Underlying fund may vary the actual hedging levels with the aim of increasing potential returns. Actual hedging levels may also vary due to the changing values of the international assets. Currency hedging may be undertaken by the investment fund or the Underlying funds. We recommend that you obtain personalised advice from an AFA before making a decision to invest or to change your investment in LifeSaver.

19 LifeSaver and the Fisher Funds TWO KiwiSaver Scheme Parallel portfolios LifeSaver and the Fisher Funds TWO KiwiSaver Scheme offer investors parallel portfolios, as they offer some of the same types of investment funds across their respective ranges. It is possible to be an investor in both LifeSaver and the Fisher Funds TWO KiwiSaver Scheme at the same time, including choosing the same type of fund (e.g. a balanced fund) from both schemes. Please note the New Zealand Fixed Income Fund and the Trans Tasman Equity Fund are not offered by the Fisher Funds TWO KiwiSaver Scheme. Please note that LifeSaver is not a KiwiSaver scheme. For a copy of the Fisher Funds TWO KiwiSaver Scheme Investment Statement, and further information on parallel portfolios, contact an AFA, or call 0508 FISHER ( ), visit or kiwisavertwo@fisherfunds.co.nz. If you wish to invest in the Fisher Funds TWO KiwiSaver Scheme, please read the Fisher Funds TWO KiwiSaver Scheme Investment Statement and complete the Application Form. We recommend that you obtain personalised advice from an AFA before making a decision to invest in the Fisher Funds TWO KiwiSaver Scheme. 19