Smart Global Aggregate Bond ETF — Interim / Quarterly Report 2020

Nov 4, 2020

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Smartshares Global Aggregate Bond ETF

Fund update for the quarter ended 30 September 2020

This fund update was first made publicly available on 29 October 2020.

What is the purpose of this update?

This document tells you how the Smartshares Global Aggregate Bond ETF has performed and what fees were charged. The document will help you to compare the fund with other funds. Smartshares Limited prepared this update in accordance with the Financial Markets Conduct Act 2013. This information is not audited and may be updated.

Note that even the lowest category does not mean a risk-free investment, and there are other risks that are not captured by this rating.

This risk indicator is not a guarantee of a fund’s future performance. The risk indicator is based on the returns data for 5 years to 30 September 2020. While risk indicators are usually relatively stable, they do shift from time to time. The risk indicator will continue to be updated in future fund updates.

See the Product Disclosure Statement for the Smartshares Exchange Traded Funds - Core Series for more information about the risks associated with investing in this fund.

How has the fund performed?

Description of this fund

Invests in international bonds and is designed to track the return on the Bloomberg Barclays Global Aggregate Bond Index, hedged to the New Zealand dollar.

Total value of the fund: $47,554,147 The date the fund started: 6 June 2019

Past year Annual return 1.86% (after deductions for charges and tax) Annual return 3.25% (after deductions for charges but before tax) Market index annual return 3.99% (reflects no deduction for charges and tax)

What are the risks of investing?

Risk indicator for the Smartshares Global Aggregate Bond ETF[1]

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Lower risk Higher risk
1 2 3 4 5 6 7
Potentially lower returns Potentially higher returns
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The market index annual return is based on the annual return of the Barclays Global Aggregate Index (100% hedged to the New Zealand dollar). Additional information about the market index is available in the 'Other Material Information' document on the offer register at disclose-register.companiesoffice.govt.nz.

The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down. A higher risk generally means higher potential returns over time, but more ups and downs along the way.

To help you clarify your own attitude to risk, you can seek financial advice or work out your risk profile at sorted.org.nz/tools/investor-kickstarter.

Smartshares Exchange Traded Funds 1

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Returns in this update are after tax at 28%.

What does the fund invest in?

Actual investment mix

What fees are investors charged?

Investors in the Smartshares Global Aggregate Bond ETF are charged fund charges. These are as follows:

	% per annum of fund’s net asset value
Total fund charges 0.30%
Which are made up of:
Total management and administration charges 0.30%
Including:
Manager’s basic fee 0.29%
Other management and administration charges 0.01%

Investors may also be charged individual action fees for specific actions or decisions (for example, for initial contributions to the fund). See the Product Disclosure Statement for the Smartshares Exchange Traded Funds - Core Series for more information about those fees.

Small differences in fees and charges can have a big impact on your investment over the long term.

The fees set out above include GST where applicable.

Example of how this applies to an investor

Tara had $10,000 in the fund and did not make any further contributions. At the end of the year, Tara received a return after fund charges were deducted of $186 (that is 1.86% of her initial $10,000). This gives Tara a total return after tax of $186 for the year.

This shows the types of assets that the fund invests in.

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Cash and cash
equivalents,
0.5%
International
fixed interest,
99.5%
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Target investment mix

This shows the mix of assets that the fund generally intends to invest in.

Asset Category
	Target asset mix
Cash and cash equivalents -
New Zealand fixed interest -
International fixed interest 100.00%
Australasian equities -
International equities -
Listed property -
Unlisted property -
Commodities -
Other -

Smartshares Exchange Traded Funds 2

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Top 10 investments[2]

Name	% of fund’s net asset value	Type	Country	Credit rating (if applicable)
iShares Global Aggregate Bond UCITS ETF 100.50% International fixed interest Ireland
Westpac NZD Current Account 0.45% Cash and cash equivalents New Zealand AA-

The top 10 investments make up 100.95% of the fund’s net asset value.

Currency hedging

The fund invests in the iShares Core Global Aggregate Bond UCITS ETF NZD Hedged (Acc), which foreign currency exposure is hedged to the New Zealand dollar.

Key personnel

This shows the directors and employees who have the most influence on the investment decisions of the fund:

Key personnel	Key personnel	Key personnel	Key personnel	Key personnel
This shows the directors and employees who have the most influence on the investment decisions of the fund:
Name	Current position	Time in current position	Previous or other positions	Time in previous / other position
Guy Roulston Elliffe Director 4 years and 10 months Corporate Governance Manager - ACC (current position) 5 years and 5 months
Stuart Kenneth Reginald Millar Chief Investment Officer - Smartshares 1 year and 4 months Head of Portfolio Management - ANZ Investments 6 years and 4 months
Hugh Duncan Stevens Chief Executive Officer - Smartshares 2 years and 7 months Chief Operating Officer - Implemented Investment Solutions Ltd 2 years and 6 months
Alister John Williams Director 4 years and 10 months Investment Manager - Trust Management 5 years and 8 months

Further information

You can also obtain this information, the Product Disclosure Statement for the Smartshares Exchange Traded Funds - Core Series, and some additional information from the offer register at disclose-register.companiesoffice.govt.nz.

Material changes

There have been no material changes to the nature of the scheme, the investment objectives and strategy of the fund, or the management of the scheme over the quarter ended 30 September 2020.

Notes

• 1 Market index returns (as well as actual returns) have been used to complete the risk indicator, as the fund has not been in existence for 5 years. As a result, the risk indicator may provide a less reliable indicator of the potential future volatility of the fund. The risk indicator for the fund uses 3 years and 9 months of market index returns.

• 2 The top 10 investments listed in the table exclude current assets and current liabilities, and as a result do not sum to 100%.

Smartshares Exchange Traded Funds 3