Glossary
The terms every NZ fund investor meets.
Plain-English reference for the 23 New Zealand managed-fund terms an investor or adviser is most likely to encounter. Every entry is sourced from FMA, IRD or the Financial Markets Conduct Act 2013 — no opinions, no recommendations.
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AFC · Total fund charge · MER
Annual fund charge
The total ongoing percentage charge paid out of a NZ managed fund each year — covering management fees, supervisor/custodian fees, audit, and other operating costs.
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ASSET-ALLOCATION
Asset allocation
The percentage split of a fund's portfolio across asset classes: equities, fixed interest, listed property, cash, alternatives. Drives the fund's risk and return profile more than security selection.
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ETF-VS-MANAGED-FUND
ETF vs managed fund
An exchange-traded fund (ETF) is a managed fund whose units trade on a stock exchange like a share. A traditional unit-priced managed fund is bought and sold directly with the manager or platform at the fund's daily NAV.
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FAP · Adviser firm
Financial Advice Provider (FAP)
A New Zealand entity licensed by the FMA to give regulated financial advice to retail clients under the Financial Markets Conduct Act 2013.
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Disclose register · disclose-register.companiesoffice.govt.nz
FMA Disclose register
The official New Zealand register of every retail managed-investment scheme — the primary public source for fund PDSs, SIPOs, OMIs, Quarterly Fund Updates and full-portfolio holdings disclosures.
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FIF rules
Foreign Investment Fund (FIF)
A New Zealand tax regime that applies to NZ-resident investors who hold most foreign shares or non-PIE foreign investment funds outside specific exemption thresholds.
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FUND-OF-FUNDS
Fund of funds
A managed fund that invests primarily in other managed funds rather than directly in shares, bonds or other assets. Common in diversified-multi-asset products.
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HEDGED-VS-UNHEDGED
Hedged vs unhedged (NZD)
A hedged fund neutralises foreign-currency movements back to NZD using forward currency contracts. An unhedged fund leaves foreign-currency exposure in place — returns include the NZD/foreign-currency move.
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INDEX-VS-ACTIVE
Index fund vs active fund
An index fund mechanically tracks a published market index. An active fund's manager makes discretionary buy/sell decisions trying to beat or differ from a benchmark.
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KIWISAVER-VS-MANAGED-FUND
KiwiSaver scheme vs managed fund
A KiwiSaver scheme fund is a tax-advantaged retirement savings product with employer/government contributions and lock-in until age 65. A managed fund has no lock-in and no contribution incentives — but lets you withdraw at any time.
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MANAGED-FUND
Managed fund
A pooled investment vehicle where many investors' money is combined and managed collectively against a stated investment objective by a professional fund manager.
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MIS · Scheme
Managed Investment Scheme (MIS)
The legal vehicle under the Financial Markets Conduct Act 2013 that holds investor money in a pooled fund. Every NZ retail managed fund is part of a registered MIS.
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OMI
Other Material Information (OMI)
A supplementary FMA-required disclosure document containing material information about a fund or scheme that is not included in the PDS.
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PERFORMANCE-FEE
Performance fee
An additional fee a fund manager charges only when fund performance exceeds a defined benchmark or hurdle rate, typically subject to a high-water mark.
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PIE fund · PIE
Portfolio Investment Entity (PIE)
A tax-efficient New Zealand fund structure where investor tax is capped at the investor's Prescribed Investor Rate (PIR), with a maximum of 28%.
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PIR
Prescribed Investor Rate (PIR)
The tax rate applied to your share of a PIE fund's taxable income. NZ has three PIRs: 10.5%, 17.5% and 28%. The maximum is 28%.
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PDS
Product Disclosure Statement (PDS)
The headline legal document a NZ managed fund or KiwiSaver scheme provides to retail investors, summarising the fund, fees, risks, and how to invest.
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QFU · Fund Update
Quarterly Fund Update (QFU)
A standardised FMA-mandated quarterly report each NZ retail managed fund publishes, summarising fees, returns, risk indicator, asset mix, top-10 holdings and fund size.
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RI · ESG · ethical investment · sustainable investment
Responsible investment (RI / ESG / ethical)
A fund that applies environmental, social and governance (ESG) screening criteria — typically excluding sectors such as tobacco, controversial weapons, fossil fuels, or applying positive sustainability tilts.
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FMA risk indicator
Risk indicator (1–7 scale)
A standardised 1–7 risk score every NZ retail managed fund must publish, calculated from the fund's price volatility (standard deviation of weekly returns) over the past five years.
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SIPO
Statement of Investment Policy and Objectives (SIPO)
The fund-manager document setting out the fund's investment objectives, strategy, asset allocation ranges, and investment-policy constraints (including any responsible-investment screens).
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MIS supervisor · Trustee
Supervisor
A licensed independent entity that holds the assets of a managed-investment scheme in trust and supervises the manager's compliance with the SIPO and FMC Act.
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NAV · Net asset value
Unit price (NAV)
The price of one unit in a managed fund — the fund's net asset value divided by the number of units on issue. The unit price is what you transact at when buying or selling.
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