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AE KiwiSaver Plan

Strict Ethical Mandate

Trust Deed and Statement of Investment Policy and Objectives

Our Strict Ethical Mandate

Always-Ethical has a Strict Ethical Mandate.

This Mandate restricts the investing activities of the Manager to permitted investments, providing transparency for investors and enables you to take responsibility for how your investments impact society.

If we obtain income that is outside of the Strict Ethical Mandate, to remain compliant, we purify the same by donating to a charity for the poor selected by the Directors of the Manager, which is at their discretion. This is the operation of the Mandate and is not a breach.

About Our Strict Ethical Mandate

We believe that the AAOIFI standards promote investments which seek to consider both financial return and social good. We believe AE KiwiSaver Plan advances a strong ethical statement and makes it an appropriate investment vehicle not only for persons who abide by similar religious principles, but also for those who ethically value these investment ideals.

Our Strict Ethical Mandate is as follows:

Equity Investments

Our Strict Ethical Mandate means that all equity investments by AE NZ must be in companies with strong balance sheets showing:

Interest-bearing debt less than 30%

Interest-bearing investments less than 30%

And illiquid assets greater than 33% (i.e. there are assets making or doing something for the good of man kind that exceed 67% of total assets).

Explanation: a company must have low-debt and highasset ratios, with a strong balance sheet, often referred to as “Blue Chip” stock.

All investments are prohibited from the following activities:

Money lending (i.e. this includes all financial institutions e.g. Banks lend money using interest based concepts)

Gambling and speculative investments  (this excludes high-risk investment products)

Derivatives (i.e. a high-risk product that, in our opinion, is considered unethical gambling)

Alcohol, Tobacco , Weapons of war, Adult entertainment 

Pork • Leverage (i.e. borrowing against investors (your) money, not assets)

Explanation of leverage: Leverage is a practice of many fund managers. In our opinion, leverage puts your investment at an unethical risk. We strongly disagree with the use of leverage.

Additionally, hedging instruments cannot be used to manage currency risk as they are derivatives and therefore are prohibited by the Strict Ethical Mandate.

Cash: No interest is received for assets held in the Scheme’s bank accounts, as the Manager has elected that these bank accounts are non-interest bearing.

Authorised Investments

AE KiwiSaver Plan may only hold “Authorised Investments”; for AE Growth Fund this is currently defined as investment products approved as compliant with the Strict Ethical Mandate and cash (New Zealand dollars).

AE  NZ is currently the only ethical investment product that has been approved as an “Authorised Investment.” AE NZ is managed by AE  Trust Management (NZ) Limited, the parent company of the Manager and AE  Growth Fund invests into the US dollar denominated AE NZ units.

Advisory Board

The AE Advisory Board is responsible for reviewing the Strict Ethical Mandate compliance of AE Kiwi Saver Plan, AE Growth Fund and its investments. The Advisory Board reviews compliance with the Strict Ethical Mandate but does not undertake investment selection. The current members of the Advisory Board can be viewed here.

Purification

AE NZ monitors the compliance of the investments on a daily basis with the assistance of IdealRatings to ensure they remain compliant. If an investment breaches the Strict Ethical Mandate it is sold at the first reasonable opportunity. This Strict Ethical Mandate ensures compliance with the AAOIFI standards.

Where investments unwittingly breach the strict Strict Ethical Mandate, AE NZ, under the AAOIFI standards, may make a payment to a recognised charity of the sum that infringed the Strict Ethical Mandate in order to purify the breach.

AE Growth Fund receives interest on behalf of Scheme Members for KiwiSaver contributions which are processed by Inland Revenue. In accordance with its Strict Ethical Mandate, th e interest received is accrued as purification and is isolated from other Scheme Assets. The current laws governing KiwiSaver prevent the Manager from donating these amounts to charity (as required by purification standards) on behalf of the Scheme Members. The Manager, if requested, will notify Scheme Members, on maturity, of the total interest received during their membership, which will allow persons of the Islamic faith to make the appropriate donations to charity on receipt of their withdrawal.

Always Ethical NZ

Strict Ethical Mandate

AE NZ applies a Strict Ethical Mandate which is defined in its Trust Deed and Statement of Investment Policy and Objectives. The Strict Ethical Mandate states the types of investing activities allowed and the ethical screening criteria applied in the selection and monitoring of investments.

Our Strict Ethical Mandate

Requires all investments to comply with the rules on permitted business activities and business financial requirements defined by the AAOIFI Shari’ah standards.

And is mandated by hundreds of years of scholarly discussion by Clerics of Islam, Christianity and Judaism. The AAOIFI Shari’ah standards have been adopted as they provide an “auditable” mandate based on serious scholarly debate and reasoning.

The Scheme adopts the AAOFI rules and combines them with the best Western practices we consider available, whilst remaining strictly compliant with the Strict Ethical Mandate.

The key difference between this Scheme and other “ethical” offerings is that our Strict Ethical Mandate has a solid scholarly basis in history of putting people before profit and prohibiting the underpinning of Western investment – interest-based financial products including moneylending and leverage.

Always-Ethical has a Strict Ethical Mandate.

About Our Strict Ethical Mandate

We believe that the AAOIFI standards promote investments which seek to consider both financial return and social good. We believe AE NZ advances a strong ethical statement and make it an appropriate investment vehicle not only for persons who abide by similar religious principles, but also for those who ethically value these investment ideals.

Our Strict Ethical Mandate is as follows:

Equity Investments

Our Strict Ethical Mandate means that all equity investments by AE NZ must be in companies with strong balance sheets showing:

Interest-bearing debt less than 30%

Interest-bearing investments less than 30%

And illiquid assets greater than 33% (i.e. there are assets making or doing something for the good of man kind that exceed 67% of total assets).

Explanation: a company must have low-debt and highasset ratios, with a strong balance sheet, often referred to as “Blue Chip” stock.

All investments are prohibited from the following activities:

Money lending (i.e. this includes all financial institutions e.g. Banks lend money using interest based concepts)

Gambling and speculative investments  (this excludes high-risk investment products)

Derivatives (i.e. a high-risk product that, in our opinion, is considered unethical gambling)

Alcohol, Tobacco , Weapons of war, Adult entertainment 

Pork • Leverage (i.e. borrowing against investors (your) money, not assets)

Explanation of leverage: Leverage is a practice of many fund managers. In our opinion, leverage puts your investment at an unethical risk. We strongly disagree with the use of leverage.

Additionally, hedging instruments cannot be used to manage currency risk as they are derivatives and therefore are prohibited by the Strict Ethical Mandate.

Cash: No interest is received for assets held in the Scheme’s bank accounts, as the Manager has elected that these bank accounts are non-interest bearing.

Authorised Investments

AE NZ may only hold “Authorised Investments”; this is currently defined as the stocks of up to 50 corporations listed on the approved stock exchanges (NYSE, NYSE MKT LLC or NASDAQ), or cash (which shall be US dollars). All investments must comply with the Strict Ethical Mandate.

Advisory Board

The Always Ethical Advisory Board is responsible for reviewing the Strict Ethical Mandate compliance of AE NZ and its investments. The Advisory Board reviews compliance with the Strict Ethical Mandate but does not undertake investment selection. The current members of the Advisory Board can be viewed here.

Purification

AE NZ monitors the compliance of the investments on a daily basis with the assistance of IdealRatings to ensure they remain compliant. If an investment breaches the Strict Ethical Mandate it is sold at the first reasonable opportunity. This Strict Ethical Mandate ensures compliance with the AAOIFI standards.

Where investments unwittingly breach the Strict Ethical Mandate, AE NZ, under the AAOIFI standards, may make a payment to a recognised charity of the sum that infringed the Strict Ethical Mandate in order to purify the breach.