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What is AE Investor?

AE Investor is a Unit Trust that issues units when you invest your money.

Your return comes from the growth in the unit price.

The manager Always-Ethical Limited

• Invests your money applying the Strict Ethical Mandate

• Actively adjusts the risk profile

These features are explained below and are unique to AE Investor

Other Features

  • It is USD denominated, redeemable in NZD or USD.
  • Its value can increase or decrease as it participates in all its investments.
  • It is a capital growth fund.
  • It is a portfolio investment entity.
  • It incurs PIE tax on its taxable income (if any).

Introduction

AE Investor is a USD denominated managed investment fund that invests in up to 50 US stocks listed on the New York Stock Exchange (NYSE), Nasdaq or Cash, which may be held in either USD or NZD. The fund has a high level of volatility.

When you invest in AE Investor, your money buys units in AE Investor. Each unit you buy will have a price calculated each day, by the unit registry, based on the value of AE Investor assets at the time. Changes in the value of AE Investor’s assets are reflected in the daily unit price (as they can fluctuate up or down).

The number of units you hold, when multiplied by the unit price, gives you the total value of your investment (the impact of PIE tax can result in a change in the number of units you hold, up or down).

The return on your investment comes from any increase or decrease in the unit price at the time you redeem the investment.

The value of each unit can vary (both up and down) daily.

AE Investor is a portfolio investment entity (PIE).

All investments comply with the Strict Ethical Mandate

Compliance with the mandate is checked each trading day.

Investments in ordinary shares of US listed companies is permitted. Preference shares are prohibited. Ordinary share investments are required to meet the financial ratios below also investments are allowed to have up to 5% of the prohibited investments below. To keep the ordinary shares investments permitted any dividends are purified for non-permissible income by the donation of part of the dividend (less than 5% of the dividend) to a charity for the poor.

 

The mandate permits:

 “Equity investments to be in companies with strong balance sheets that meet certain financial ratios these financial ratios are:

 Financial ratios: 

  • Interest-bearing debt less than 30%
  • Interest-bearing investments less than 30%
  • The assets of the company making or doing something for the good of humanity to exceed 67% of total assets

Any breach of these financial ratio’s results in the sale of the investment the next market day.

 Prohibited Investments: the fund does not invest in any of these activities, the equity investments may, provided the prohibited investment is under 5% of the business activity and is appropriately purified. 

  • Products whose return is based on receipt of interest, including money lending*

 *Explanation: this excludes all financial institutions, Banks, Money Lenders and Insurance Companies. 

  • Gambling and speculative investments*

*Explanation: this is not just a prohibition of gambling organisations like casinos, but also excludes investment products that rely on chance for success. 

  • Derivatives* 

*Explanation: these are high-risk products that rely on chance for success, these are gambling. 

  • Alcohol
  • Tobacco
  • Weapons of war
  • Adult entertainment
  • Gold and Silver hedging these are gambling
  • Pork*

*Explanation: This limits the investment in meat-based businesses. 

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

*Explanation of leverage: Leverage is a practice of many fund managers. Leverage puts your investment at an unethical risk. Leverage is prohibited. 

  • Fossil fuel exploration

If an investment is suspected of not complying with the Strict Ethical Mandate, it is sold on the next trading day. 

Any cash held in the Scheme is held in US dollars or NZ dollars. 

The Manager uses IdealRatings to:

 

  • Daily monitor that each investment meets the Strict Ethical Mandate.
  • To calculate any “purification” required to meet the Strict Ethical Mandate.

Cash

Any cash held in the Scheme is held in US dollar or NZ dollar interest-free bank accounts.

The Strict Ethical Mandate prohibits investment in fixed-return products or derivative instruments.