Our client philosophy is based on two principles:

• Clients are individuals with unique needs, goals and attitudes and they require advice and portfolio strategies that reflect their individuality;

• Clients’ behavioural biases impact their investing decisions and need to be taken into account if they are to be advised successfully.

Over the last decade, NZ Funds has researched and developed, in conjunction with its key advisory clients, an integrated advice and investment management process built upon the dual foundations of behavioural and traditional finance theory. The result is NZ Funds’ goal-based advice process which advisers apply to design clients’ investment strategies based, first and foremost, on a deep understanding of each clients’ financial needs and lifestyle goals.

Working closely with the client’s financial adviser, we build portfolios around a client’s various needs and goals, taking specific account of the timing of those requirements. This enables clients to invest with more confidence, knowing that part of their portfolio will be available to reliably fund the lifestyle they have planned in the shorter term, while the balance of their portfolio focuses on protecting and growing their spending power over the longer term.

The tangible outcome of our advice process, as applied by the financial adviser, is a tailored, written financial plan for each client.

The tangible investment outcome is a series of discrete investment Portfolios managed by NZ Funds and a select group of investment managers globally, which together form a tailored investment strategy designed to meet specific and defined client goals.

NZ Funds is an active investor and each of the Portfolios is managed using our proprietary active investment management approach. The aim of this approach is to place a balanced emphasis on:

• the preservation of clients’ capital;

• the pursuit of superior investment returns.

A key element of this approach is our dynamic hedging strategy, where we apply tailored risk management processes to all of the assets owned on clients’ behalf, with the aim of protecting clients’ capital during periods of significant market downturn.

Unlike traditional investment managers, we do not confine or console ourselves with the achievement of returns in line with the “market”. The benchmarks that matter most to clients are those defined by their own financial needs and goals; namely how much they need and when they need it, and our objective is to reliably deliver on these.

Each of the Portfolios we manage is tailored specifically to integrate with the advice process utilised by the financial advisers we work with. The Portfolios are designed to be used together, as part of a coherent investment strategy, with the resulting Portfolio allocations being unique to each and every client.

In its role as Portfolio manager, NZ Funds is responsible for the day-to-day management of each Portfolio, including the selection of specialist investment managers and the management of the dynamic hedging strategies.