Investment Philosophy

AMP Wealth Management New Zealand Investment Philosophy

This document sets out our investment philosophy, in terms of the core principles we will follow when investing our customers’ money. We believe that following these principles will deliver good outcomes for our customers, particularly when supported by our product and help strategies.

1. For all AMP-branded Funds:

1.1. Sustainable Investing

We believe investing sustainably will deliver long-term returns in line with or better than the traditional markets. We have a clear approach to sustainable investing (see our Sustainable Investment Philosophy) that avoids investing in companies that participate in business or sectors that are our focus areas in terms of non-sustainability. These focus areas are informed by what we determine to be damaging to people and the planet. We also consider market research and published consumer surveys to provide a view of consumers. We will continue to evolve this approach and seek to find opportunities to support positive change through investing in companies that demonstrate strong environmental, social and governance attributes.

1.2. Strategic asset allocation drives returns

We believe that the strategic asset allocation (SAA) drives most of the returns available in the market for diversified funds. We will annually review the medium to long- term risk and return assumptions and ensure diversified funds are appropriately positioned for the market outlook over a 5-year timeframe. We believe this will produce better net outcomes than actively tilting funds based on shorter-term views, thereby reducing variability in returns. If there is a significant market movement or the global economic landscape, we will review our long-term assumptions and asset allocations more frequently and as we believe appropriate.

1.3. Index management delivers value

We will access returns using mainly index management strategies, as we believe that it is difficult to consistently outperform the market via the adoption of short-term active positions, and keeping investment costs down is a key component of returns. We do consider other non-index management strategies if they can clearly demonstrate that the anticipated returns outweigh the additional investment management cost, and they are required to deliver our SAA strategy.

1.4. Transparency and Simplicity

We will invest in assets which are clear and easily understood and accessed via reputable markets, as this will keep our offer simple and will aid customer understanding. We will invest in private market investments where required to deliver our SAA strategy.

1.5. Accessibility

We believe that customers want their funds to be readily accessible, as and when they wish to access their investments or savings. We will make sure that we invest in ways that allow this to happen by keeping funds liquid within the parameters stated in our liquidity policy. We will regularly test the liquidity of our funds, against minimum requirements in our policy, to ensure that we can continue to meet the needs of our customers to access their investments and savings.

1.6. Currency

We do not expect that, over the long term, actively trading positions in foreign currency exposures will of itself add long term value. We will therefore review our foreign currency settings as part of our SAA annual review.

2. Investment Style Choice

We recognise that some customers may like to access a different approach to investing. Accordingly, we will continue to offer a selection of funds offered by third party managers which are available for our AMP KiwiSaver Scheme and New Zealand Retirement Trust customers to choose from. These funds will provide access to a range of different investment styles and philosophies, which are different from AMP’s. We will offer a selection of diversified funds that utilise a more active approach to investing, so customers can choose a selection of styles.

3. Related Policies

Our investment philosophy is complemented by a number of related policies, including our:

• Sustainable Investment Philosophy
• Cash Management and Rebalancing Policy
• Liquidity Policy
• Currency Hedging and Monitoring Policy
• Approach to Asset Allocation Policy