"Benchmark" is the portfolio's default allocation to each asset class. Brook may change the allocation to any asset class. The amount of any shift from the benchmark allocation is restricted by the percentages shown as "Range".

 

The term Benchmark may also refer to the market index that a portfolio is compared to. The performance of a New Zealand share portfolio for example, is often compared to the NZX-50 index that measures the performance of the largest 50 companies listed on the New Zealand stock exchange.

 

"Brook"is Brook Asset Management Limited.

  

“Brook Unit Trusts Master Trust Deed“ means a trust deed for the Brook Asset Management Limited unit trusts, a master trust deed between Trustees Executors Limited and Brook governing existing unit trusts and providing for the establishment of new unit trusts.

 

"Cash" is the term used for funds on call at a registered bank or short term bank deposits (generally less than 7 days).

  

“Derivatives” are financial instruments whose price is dependent on one or more underlying assets. Underlying assets may be Growth Assets or Income Assets. Derivatives can be used for speculative purposes or for hedging. Examples of derivatives include forward exchange contracts, interest rate swaps, warrants, sharemarket index futures, commodity futures and share options.

 

“Dollar Cost Averaging” occurs when a fixed dollar amount is invested regularly over time. The fixed amount will purchase less of an asset when the price rises, but more of an asset when prices drop.  

  

"Growth Assets" include company shares, listed property trusts, direct property, commodities, hybrids, warrants and stapled securities. Asset values are dependent on a variety of factors such as company profitability and growth potential, general economic growth rates, changes to the business environment, political changes or supply issues.

 

"Hedge" in financial markets means to put in place a strategy that limits or completely offsets changes in one aspect of an asset's value. In the case of currencies, this means entering into a transaction whereby changes in the value of an offshore asset are not affected by changes in the value of the currency involved. For example, if the Scheme holds US company shares, the value of the New Zealand dollar against the US dollar could be hedged so that changes in the currency exchange rate have little or no impact on the value of the share holdings. The Scheme's exposure is restricted to the value of the shares. It sounds somewhat complicated, but in modern financial markets, it is actually a fairly standard transaction.

 

"IRD" means the Inland Revenue Department.

 

"Income Assets" generally pay a rate of interest and have a fixed value on a fixed maturity date. Their values may fluctuate but they are usually less volatile than Growth Assets. Assets in this category include government bonds, bank bills, corporate bonds, mortgages, mortgage backed securities and floating rate notes. Another term often used to describe Income Assets is "Fixed Interest".

 

"KiwiSaver Act" means the KiwiSaver Act 2006.

  

"Member Tax Credit Amount" is the credit (if any) payable in respect of your contributions to the Scheme.

 

"Scheme" is the Brook Professional KiwiSaver Scheme.

  

"Trustee" is Trustees Executors Superannuation Limited.