Smart NZ Bond ETF — Fund Information / Factsheet 2021

Aug 15, 2021

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Smartshares Exchange Traded Funds Smartshares NZ Bond ETF

Fund update for the quarter ended 30 June 2021

This fund update was first made publicly available on 28 July 2021.

What is the purpose of this update?

This document tells you how Smartshares NZ 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.

Description of this fund

Invests in New Zealand bonds, with the objective of outperforming the S&P/NZX A-Grade Corporate Bond Index over rolling 3-year periods. The investment manager is Nikko Asset Management New Zealand Limited.

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.

Note that even the lowest category does not mean a riskfree 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 June 2021. 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 – Specialist Series for more information about the risks associated with investing in this fund.

Total value of the fund: $350,780,261 The date the fund started: 12 November 2015

What are the risks of investing?

Risk indicator for Smartshares NZ Bond ETF

Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk	Lower riskHigher risk
	1	2	3	4	5	6	7
Potentially lower returnsPotentially higher returns

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.

How has the fund performed?

	Average over past 5 years	Past year
Annual return(after deductions for charges and tax)2.92%-0.03%
Annual return(after deductions for charges but before tax)4.03%-0.05%
Market index annual return(reflects no deduction for charges and tax)3.74%-1.20%

The market index annual return is based on the annual return of the S&P/NZX A-Grade Corporate Bond Index. Additional information about the market index is available in the 'Other Material Information' document on the offer register at discloseregister.companiesoffice.govt.nz.

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Annual return graph

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----- Start of picture text ----- 7%6%5%4%3%2%1%0%31/03/2017 31/03/2018 31/03/2019 31/03/2020 31/03/2021 AverageannualreturnSmartshares NZ Bond ETF Market index6.0%4.7%4.0% 4.2% 4.2% 4.1%Annual return3.1% 3.0% 3.2%2.5%2.0% 1.9%----- End of picture text -----

This shows the return after fund charges and tax for each year ending 31 March since the fund started. The last bar shows the average annual return since the fund started, up to 30 June 2021.

Important: This does not tell you how the fund will perform in the future.

Returns in this update are after tax at 28%.

What fees are investors charged?

Investors in Smartshares NZ Bond ETF are charged fund charges. In the year to 31 March 2021 these were:

	% per annum of fund’s netasset value
Total fund charges0.54%
Which are made up of:
Total management and administrationcharges0.54%
Including:
Manager’s basic fee0.53%
Other management andadministration charges0.01%1

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 – Specialist 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 incurred a loss after fund charges were deducted of -$3 (that is -0.03% of her initial $10,000). This gives Tara a total loss after tax of -$3 for the year.

What does the fund invest in?

Actual investment mix

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

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----- Start of picture text ----- Cash and cashequivalents,0.0%New Zealandfixed interest,100.0%----- End of picture text -----

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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 interest100.00%
International fixed interest-
Australasian equities-
International equities-
Listed property-
Unlisted property-
Commodities-
Other-

Top 10 investments

Name		Type	Country	Credit rating(if applicable)
	% of fund’s net
	asset value
New Zealand Government 20/09/25 2.0% IB6.38%New Zealand fixed interestNew ZealandAAA
ANZ Bank New Zealand Ltd 20/03/24 3.03%%CB3.32%New Zealand fixed interestNew ZealandAA-
Kommunalbanken AS 02/07/30 1.25%% GB3.03%New Zealand fixed interestNorwayAAA
Insurance Australia Group Ltd 15/06/43 5.15%%CB2.80%New Zealand fixed interestAustraliaBBB
TR Group Ltd 07/03/24 4.533%% CB2.45%New Zealand fixed interestNew Zealand
Kiwibank Ltd 20/09/24 2.155%% CB2.43%New Zealand fixed interestNew Zealand
Chorus Ltd 06/12/23 4.35%% CB2.36%New Zealand fixed interestNew ZealandBBB
New Zealand Government 15/05/32 2.00% GB2.29%New Zealand fixed interestNew ZealandAAA
Genesis Energy Ltd 03/04/25 5.00%% CB2.21%New Zealand fixed interestNew ZealandBBB+
Fonterra Co-operative Group Ltd 19/06/255.08%% CB2.19%New Zealand fixed interestNew ZealandA-

The top 10 investments make up 29.46% of the fund’s net asset value.

Currency hedging

The fund does not invest in non-New Zealand dollar denominated assets.

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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 / otherposition
Fergus McDonaldHead of Bonds andCurrency - NikkoAsset Management21 yearsNZ Fixed Interest PortfolioManager - Nikko AssetManagement New ZealandLimited10 years and 5 months
Ian BellewFixed IncomeManager - NikkoAsset Management9 years and 6 monthsCash Portfolio Manager -Nikko Asset Management NewZealand Limited4 years and 10 months
Matthew JohnsonFixed IncomeManager - NikkoAsset Management2 years and 7 monthsSenior Strategy Analyst - TheComfort Group - Asia Pacific2 years, 6 months
George CarterManaging Director -Nikko AssetManagement5 years and 8 monthsDirector Head of Distribution -AMP Capital Investors NZLimited6 years and 4 months

Further information

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

Notes

• 1 We charge fixed fund charges that cover normal fund operating costs. For disclosure purposes, supervisor, audit and legal costs are not included in the manager’s basic fee, but are included in the other management and administration charges.

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