# Harbour Asset Management Limited — Public Disclosure Statement *Mirror of FAP Public Disclosure Statement filed under FMC Act 2013 s431.* - **Version date:** 2026-05-18 - **Source URL:** http://www.harbourasset.co.nz/assets/Legal/FMA-Docs/Harbour-Investment-Funds-PDS-Singles.pdf?hash=60ed7cae912911038fea9e99e92078aa52e47eb1 - **Source PDF SHA256:** `f364621d631ee08686b4189a24684702...` - **Confidence tier:** C (LLM-extracted from PDF) - **Extracted via:** claude-haiku-4-5-20251001 - **Ingested:** 2026-05-18 - **Machine-readable facts:** [facts.json](https://financeadvisers.co.nz/api/provider/FSP3241/facts.json) - **All versions on file:** [filings.json](https://financeadvisers.co.nz/api/provider/FSP3241/filings.json) - **Authoritative register:** https://fsp-register.companiesoffice.govt.nz/companies/app/ui/pages/companies/FSP3241 > **About this document.** FAP Public Disclosure Statements are regulated documents that financial advice providers must publish under the Financial Markets Conduct Act 2013, section 431. The content below is the FA-NZ mirror — machine-parsed from the source PDF on the date shown above. For binding regulatory purposes, refer to the firm's own current publication via the source URL above. --- # Product Disclosure Statement – Australasian Equities and Fixed Interest Funds Issued by Harbour Asset Management Limited 1 April 2026 This document replaces the Product Disclosure Statement dated 21 November 2025 --- ## 1. Key information summary ### What is this? This is a managed investment scheme. Your money will be pooled with other investors' money and invested in various investments. Harbour Asset Management Limited (Harbour, we, us or our) will invest your money and charge you a fee for our services. The returns you receive are dependent on our investment decisions and the performance of the investments. The value of those investments may go up or down. The types of investments and the fees you will be charged are described in this document. How you invest into the funds outlined in this product disclosure statement (Funds) is related to the size of your investment, and whether you require financial advice. See our website: www.harbourasset.co.nz/invest-with-us for more details. The Funds are also available via a Portfolio Investment Entity (PIE) Investor Proxy or custodial service, which you or your financial adviser use (Service). This Service invests in the Funds on your behalf and is therefore the investor to us. In some instances, references in this document to "you" are referring to the Service you use. For more information please see "10. How to Apply". For larger amounts, it may be possible for you to invest directly with Harbour in the Funds outlined in this Product Disclosure Statement (PDS) if you do not require financial advice. See our website: www.harbourasset.co.nz/invest-with-us for more details. ### What will your money be invested in? There are 9 Funds offered under this PDS. These investment options are summarised on the following page. More information about the investment target and strategy for each investment option is provided in "3. Description of your investment option(s)". ### Who manages the Harbour Investment Funds? The Manager of the Funds is Harbour Asset Management Limited. See "7. Who is involved?" for more information about us. ### What are the returns? The return on your investment comes from: - any increase or decrease in the Fund's unit price, and - any income distributions made from the Fund. The Harbour NZ Core Fixed Interest Fund, Harbour NZ Corporate Bond Fund, Harbour Australasian Equity Income Fund (quarterly), Harbour Real Estate Investment Fund, Harbour NZ Index Shares Fund and Harbour Sustainable NZ Shares Fund (6 monthly) intend to pay distributions. The other Funds offered under this PDS do not distribute income; any accrued income for these Funds is reflected in each Fund's unit price. See "2. How does this investment work?" for more information. ### How can you get your money out? You can withdraw some or all of your investment at any time by completing a signed withdrawal request and providing it to your Service or directly to Harbour as applicable. We can suspend or defer withdrawals in certain circumstances. We may suspend withdrawals or delay payments from a Fund if it is in the best interests of all investors in the Fund or to protect a Fund's PIE status. See "2. How does this investment work?" for more information. Your investment in the Funds can be sold but there is no established market for trading these financial products. This means that you may not be able to find a buyer for your investment. ### How will your investment be taxed? Each Fund is a PIE. The amount of tax you pay in respect of a PIE is based on your Prescribed Investor Rate (PIR). To determine your PIR, go to the Inland Revenue website at www.ird.govt.nz/roles/portfolio-investment-entities/using-prescribed-investor-rates. See "6. What taxes will you pay?" for more information. ### Where can you find more key information? We are required to publish quarterly updates for each Fund. The updates show the returns and the total fees actually charged to investors, during the year. The latest fund updates are available at www.harbourasset.co.nz. We will also give you copies of these documents on request. --- ## Fund Summary Table | FUND NAME | DESCRIPTION | RISK INDICATOR | ANNUAL FUND CHARGES (ESTIMATE) EX. GST (IF ANY) | |-----------|-----------|---|---| | Harbour NZ Core Fixed Interest Fund | The Fund is an actively managed investment grade bond fund that invests mainly in New Zealand Government bond and corporate bond fixed interest securities.¹ | LOWER RISK 1 2 **3** 4 5 6 7 HIGHER RISK | 0.63% | | Harbour NZ Corporate Bond Fund | The Fund is designed for investors seeking income through a diversified portfolio of primarily investment grade corporate bond fixed interest securities.¹ | LOWER RISK 1 2 **3** 4 5 6 7 HIGHER RISK | 0.45% | | Harbour Long Short Fund | The Fund is an actively managed, high conviction portfolio investing principally in 'long' and 'short' listed New Zealand and Australian equities. The focus is on delivering positive returns through the market cycle by investing in long and short-sold equity positions with no particular attention to an equity benchmark. The fund is expected to have lower volatility than equity benchmarks.¹ | LOWER RISK 1 **2** 3 **4** 5 6 7 HIGHER RISK | 1.18%† | | Harbour NZ Index Shares Fund** | The Fund is passively managed tracking the companies in the Solactive New Zealand Top 50 Capped Index. | LOWER RISK 1 2 3 4 **5** 6 7 HIGHER RISK | 0.20% | | Harbour Sustainable NZ Shares Fund*** | The fund invests in companies in the S&P NZX Portfolio Index, with exclusions to companies including but not limited to large carbon emitters, producers of alcohol, gambling services, controversial weapons and military equipment, pornography, firearms, tobacco, recreational cannabis, child labour, companies with human and animal rights violations. There will also be positive and negative tilts to the remaining companies based on Harbour's proprietary Corporate Behaviour Score. | LOWER RISK 1 **2** 3 4 **5** 6 7 HIGHER RISK* | 0.25% | | Harbour Real Estate Investment Fund | The Fund aims to capture the income yield and medium-term capital growth characteristics of real estate assets by investing principally in listed real estate assets and enhance diversification and return potential against the benchmark.¹ | LOWER RISK 1 2 3 4 **5** 6 7 HIGHER RISK | 0.72% | | Harbour Australasian Equity Income Fund | The Fund is designed to generate attractive levels of quarterly income from a diversified portfolio of predominantly New Zealand and Australian listed equities that pay sustainable and growing dividend yields as well as holding cash and fixed interest securities.¹ | LOWER RISK 1 2 3 **4** 5 6 7 HIGHER RISK | 1.03% | | Harbour Australasian Equity Fund | The Fund is an actively managed strategy that invests predominantly in New Zealand and Australian listed equities. The Fund has a growth-oriented investment approach to generate alpha (return over the benchmark) for investors.¹ | LOWER RISK 1 2 3 4 **5** 6 7 HIGHER RISK | 1.07% | | Harbour Australasian Equity Focus Fund | The Fund is an actively managed, high conviction fund investing principally in New Zealand and Australian listed equities. This Fund invests in quality growth companies that the Harbour equity research team rank as their best research ideas.¹ | LOWER RISK 1 2 3 4 **5** 6 7 HIGHER RISK | 1.22%† | ¹ This Fund incorporates an environmental, social and governance (ESG) strategy including integrating Harbour's proprietary Corporate Behaviour Survey and external provider scores into investment decision making, company engagement, voting and zero tolerance exclusions. Additional information on screening thresholds and processes are outlined in the exclusions section of our Environmental, Social, Governance Policy (ESG Policy). **NOTE 1:** A combination of actual Fund returns and market index returns have been used to determine the risk indicator for the Harbour Sustainable NZ Shares Fund (launched 1-04-2021) as this Fund has not been operational for five years. The risk indicator may therefore provide a less reliable indicator of potential future volatility of this Fund. **NOTE 2:** The Harbour NZ Equity Advanced Beta Fund transitioned to the Harbour NZ Index Shares Fund on 1 April 2021. **NOTE 3:** Screening materiality thresholds are outlined in the ESG Policy. **NOTE 4:** The annual fund charge includes a performance fee estimate. See pages 9 & 10 for more information. See "4. What are the risks of investing?" for an explanation of the risk indicator and for information about other risks that are not included in the risk indicator. To help you clarify your own attitude to risk, you can seek financial advice or work out your own risk profile at www.sorted.org.nz/tools/investor-profiler. --- ## 2. How does this investment work? This PDS is on offer to purchase units in the Funds. Each Fund is constituted within a managed investment scheme that is governed by the revised Harbour Trust Deed (dated 21 September 2016) as amended from time to time. The money you invest buys units in the Fund or Funds you choose. Your money is held on trust and pooled with the money of other investors in the Fund. We use the money to purchase assets for the Fund on behalf of all the investors. Harbour investment professionals select and manage the assets in each of the Harbour Funds. Refer to "3. Description of your investment options" for more information. Each Fund's assets are valued independently of us by Apex Investment Administration (NZ) Limited (the Administration Manager). The price of each unit you receive depends on the value of the Fund at the time you invest. The purchase of units does not give you legal ownership of a Fund's assets, but gives you the right to the return from the assets in the Fund. The unit price is calculated by dividing the net asset value of a Fund by the number of units the Fund has on issue. The unit price is calculated each business day and is rounded to four decimal places. The value of units in a Fund fluctuates according to the changing value of the assets in which the Fund has invested. A change in the value of a Fund's assets affects the unit price of your units. The number of units you have (your unit holding), when multiplied by the unit price, gives you the total value of your investment in any one Fund (although the impact of tax can result in a change in the number of units you hold, up or down, as the unit price is before tax). Each day, the previous day's unit prices for the Funds can be found on our website www.harbourasset.co.nz/performance. No assets of a Fund will be available to be applied to meet the liabilities of any other Funds managed by us. ### The key benefits of investing in the Harbour Investment Funds are: **Diversification** – access to a widely diversified portfolio of securities in the relevant asset class. Diversification can assist with lowering the volatility and enhancing the potential returns of your investment in that asset class. **Professional investment management** – your investments are managed by experienced and proven investment teams. **Independent governance** – oversight of the Funds by The New Zealand Guardian Trust Company Limited (Guardian Trust). **Responsible investing** – ESG factors are actively integrated in the analysis and construction of the funds by setting ethical exclusions and assessing investments through our proprietary survey, external research providers and engagement with company management and directors. Please refer to the ESG Policy for more information. ### The return on your investment comes from: - any increase or decrease in the unit price; and - any income distributions made from the Fund. ### Distributions The Harbour NZ Core Fixed Interest Fund, Harbour NZ Corporate Bond Fund and Harbour Australasian Equity Income Fund intend to pay distributions quarterly in March, June, September and December. The Harbour Real Estate Investment Fund, Harbour NZ Index Shares Fund and Harbour Sustainable NZ Shares Fund intends to pay distributions 6-monthly in March and September. The other Funds do not pay distributions. The unit price of these Funds will generally drop immediately after the end of a distribution period, reflecting the amount of distribution paid from the Fund. Distribution amounts you receive will depend on the number of units you hold at the end of the distribution period and the amount per unit to be distributed by the relevant Fund. Distribution amounts will vary between distribution periods and are not guaranteed. Some Services offer the option to either pay out or reinvest distributions. You will need to contact your Service to see if this is available to you. If you invest directly with Harbour, the option to have distributions paid out or reinvested is available to you. ### Making investments Investment into the Funds will be dependent on the amount you have available to invest in the Funds and whether you require financial advice. For many investors, this may be via a Service that we deal with. Investments can be made by completing the application form and providing it to your Service. Your Service will then apply to us for units in a Fund on your behalf. Some Services have a minimum initial investment amount as well as minimum regular contribution amounts. Please refer to your Service for any minimum requirements that may apply to you. If you do not require financial advice on the Funds outlined in this PDS, you may also invest directly with Harbour subject to certain minimum amounts – refer to our website at www.harbourasset.co.nz/invest-with-us for more details. Please see "10. How to apply" for more information or contact us at contactus@harbourasset.co.nz. ### Withdrawing your investments To withdraw your investment in a Fund, you will need to complete a withdrawal form and provide it to your Service. Your Service will then forward this to us on your behalf. The number of units redeemed will be calculated by dividing the dollar amount by the unit price. Your Service will deduct from your redemption proceeds an amount equal to any applicable PIE tax on income allocated to redeemed units and pay the net proceeds as soon as possible after we have processed the request, not exceeding 10 business days. Your Service may impose minimum amounts you can withdraw and may require you to withdraw all of your investment if a withdrawal would cause your investment in a Fund to fall below a particular level. We may suspend withdrawals or delay payment from a Fund if it is in the best interests of all investors in the Fund or to protect a Fund's PIE status. If this is the case, you may need to wait for a longer period of time for your withdrawal proceeds. These conditions are summarised in the "Other Material Information document" (OMI) on the offer register and are set out in full in the Trust Deed on the scheme register. Both registers can be found at www.disclose-register.companiesoffice.govt.nz (Disclose). ### How to switch between Funds You can switch between Harbour Investment Funds as often as you like by completing the relevant form and providing it to your Service. You will need to contact your Service to ensure their minimum switch amount has been met or the required balance is maintained in a Fund. A switch is essentially a withdrawal from one fund and an application into another. As such, any PIE tax will be deducted from the withdrawal with the remaining proceeds applied to the new Fund. There is no charge for switching. Once we receive your form, completed in full, Harbour will use all reasonable endeavours to process the switch on, or as soon as possible after, the date you refer to in the completed form. In some market conditions, Harbour may apply a buy-sell spread to investments, withdrawals or switches in some Funds. See section 5 for more information on buy-sell spreads. --- ## 3. Description of your investment option(s) | FUND NAME | SUMMARY OF INVESTMENT OBJECTIVES AND STRATEGY | TARGET INVESTMENT MIX | RISK CATEGORY | MINIMUM SUGGESTED INVESTMENT TIMEFRAME | |-----------|-----------|---|---|---| | Harbour NZ Core Fixed Interest Fund¹ | **Objective:** To outperform the benchmark by 100 basis points per annum over a rolling 3-year period. **Benchmark:** Bloomberg NZ Bond Composite 0+Yr Index**. **Strategy:** The Fund is an actively managed investment grade bond fund that invests mainly in New Zealand Government and corporate fixed interest securities. | 85% NZ fixed interest, 10% intl fixed interest, 5% cash & cash equivalents | 3 - This Fund has a low to medium level of volatility | Medium to long term investment horizon. Minimum 3 years | | Harbour NZ Corporate Bond Fund¹ | **Objective:** To outperform the benchmark after fees on a rolling 12-month basis. **Benchmark:** S&P/NZX Investment Grade Corporate Bond Total Return Index**. **Strategy:** The Fund provides access to income through a diversified portfolio of primarily investment grade corporate bond fixed interest securities. | 95% NZ fixed interest, 5% intl fixed interest | 3 - This Fund has a low to medium level of volatility | Medium to long term investment horizon. Minimum 3 years | | Harbour Long Short Fund¹ | **Objective:** To deliver positive returns through the market cycle by investing in long and short equity positions. **Benchmark:** 15% S&P/NZX 50 Index, 15% S&P/ASX 200 Index, & 70% S&P/NZX Bank Bills 90-Day Index**. **Strategy:** The Fund is an actively managed, high conviction portfolio investing principally in 'long' and 'short' listed New Zealand and Australian equities. The focus is on delivering positive returns through the market cycle by investing in long and short-sold equity positions with no particular attention to an equity benchmark. The fund is expected to have lower volatility than equity benchmarks. Given the unique features of this Fund, it may not be appropriate for all investors. | 30% Australasian equities, 70% cash & cash equivalents | 4 - This Fund has a medium to high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour NZ Index Shares Fund | **Objective:** To provide a return (before tax, fees, and other expenses) that closely tracks the Solactive New Zealand Top 50 Capped Index. **Benchmark:** Solactive New Zealand Top 50 Capped Index (including imputation credits)**. **Strategy:** The Fund is passively managed tracking the companies Solactive New Zealand Top 50 Capped Index. | 99% Australasian equities, 1% cash & cash equivalents | 5 - This Fund has a high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour Sustainable NZ Shares Fund | **Objective:** To provide a return by investing in companies in the S&P/NZX 50 Portfolio Index, with exclusions to companies that do not meet Harbour's criteria of Responsible Investing. **Benchmark:** S&P/NZX50 Portfolio Index (gross including imputation credits)**. **Strategy:** This fund invests in companies in the S&P/NZX 50 Portfolio Index, with exclusions to companies including but not limited to, large carbon emitters, gambling, firearms, and companies with human and animal rights violations. For full details of the exclusions for this Fund please see the ESG Policy on our website at Responsible Investing » Harbour Asset Management. There are positive and negative tilts applied to the remaining companies based on Harbour's proprietary Corporate Behaviour Score. The Fund has the ability to implement securities lending. Securities lending involves the transfer of legal title and beneficial interest in securities to a third-party borrower, in some cases against collateral security, and in other cases with other appropriate risk mitigation arrangements. | 99% Australasian equities, 1% cash & cash equivalents | 5* - This Fund has a high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour Real Estate Investment Fund¹ | **Objective:** To exceed the benchmark return plus 1% per annum over the medium term. **Benchmark:** S&P/NZX All Real Estate Index (gross including imputation credits)**. **Strategy:** The Fund will predominantly be invested in sustainable dividend generating companies, which derive their economic value from owning traditional real estate assets with appropriate financial and governance structures in place. In addition, the Fund may invest in shares of companies that derive their economic value from the control of real estate assets, but don't meet the strict definition of listed property securities or REITS. | 85% Listed property, 12.5% Australasian equities, 2.5% cash & cash equivalents | 5 - This Fund has a high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour Australasian Equity Income Fund¹ | **Objective:** To provide returns by investing in higher dividend yielding companies in the New Zealand and Australian markets. **Benchmark:** 60% S&P/ASX Industrials Index (equally weighted and 90% hedged to NZD) and 40% S&P/NZX 50 Portfolio Index**. **Strategy:** The Fund is designed to generate quarterly income from a diversified portfolio of Australasian equities that pay sustainable and growing dividend yields (the amount a company pays out in dividends each year relative to its share price), as well as holding cash and fixed interest securities. | 90% Australasian equities, 10% NZ fixed interest | 4 - This Fund has a medium to high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour Australasian Equity Fund¹ | **Objective:** To achieve a gross return of 5.0% per annum above the benchmark over the long term. **Benchmark:** S&P/NZX 50 Index gross including imputation credits**. **Strategy:** The Fund provides actively managed exposure to New Zealand and Australian equities. This fund has a growth-oriented active investment management approach, including ESG integration to generate alpha (return over the benchmark) for investors. | 98% Australasian equities, 2% cash & cash equivalents | 5 - This Fund has a high level of volatility | Medium to long term investment horizon. Minimum 5 years | | Harbour Australasian Equity Focus Fund¹ | **Objective:** To deliver medium to long term capital growth through investing in quality businesses with strong growth prospects. **Benchmark:** The Fund does not follow a particular benchmark. However, the following is the appropriate market index: 50% S&P/NZX 50 Index (gross with imputation credits) and 50% S&P/ASX 200 Index (total return in AUD with 50% hedged into NZD) **. **Strategy:** The Fund is an actively managed fund investing in New Zealand and Australian equities. It is a high conviction fund where the portfolio will consist of companies our analysts have researched and have a high belief will perform over the medium to longer-term. | 95% Australasian equities, 5% cash & cash equivalents | 5 - This Fund has a high level of volatility | Medium to long term investment horizon. Minimum 5 years | ¹ These funds incorporate an ESG strategy including integrating Harbour's proprietary Corporate Behaviour Survey and external provider scores into investment decision making, company engagement, voting and exclusions. Additional information on screening thresholds and processes are outlined in our ESG Policy. **NOTE 1:** A combination of actual Fund returns and market index returns have been used to determine the risk indicator for the Harbour Sustainable NZ Shares Fund (launched 1-04-2021) as this Fund has not been operational for five years. The risk indicator may therefore provide a less reliable indicator of potential future volatility of this Fund. **NOTE 2:** Further information, including relevant benchmark and index provider disclaimers, is set out in the Other Material Information (OMI) for the Harbour Investment Funds. ### Target investment mix Each Fund has a long term target investment mix & investment limits within various asset classes to which the portfolios are managed. The actual investment mix will vary from the target investment mix, depending on many factors. Actual and target mix will be published each quarter in the relevant Fund update. Some of the Funds seek to achieve their objective by investing directly into wholesale Funds. For further information about each Fund's structure, investment limits & permitted investments, please refer to the SIPO on Disclose. ### Changes to the SIPO We can make changes to the SIPO for each Fund in accordance with the Trust Deed and the FMC Act. Before making changes to the SIPO, we will consider if the changes are in the best interests of investors generally and consult with the Supervisor. We will give notice of changes to unit holders of the relevant Fund prior to effecting any material changes. The current SIPO can be found on Disclose. ### Benchmark (or Market Index) The term benchmark used in the table above, and throughout the documents, means the standard against which the performance of the Fund is measured. For each Fund, the market index or combined market indices used to measure the performance (the Fund's Benchmark) can be seen. Our use of the various market indices referred to here are subject to certain terms, conditions and disclaimers as described in the OMI, on Disclose. Further information about the assets in the Funds can be found in the fund updates on our website www.harbourasset.co.nz. --- ## 4. What are the risks of investing? ### Understanding the risk indicator Managed funds in New Zealand must have a standard risk indicator. The risk indicator is designed to help investors understand the uncertainties both for loss and growth that may affect their investment. You can compare funds using the risk indicator. An example risk indicator is below. | LOWER RISK | | | | | | HIGHER RISK | |---|---|---|---|---|---|---| | | | | | | | | | Potentially lower returns | | | | | | Potentially higher returns | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | The risk indicator for each Fund can be found on page 3 of this PDS. 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 (volatility). 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 www.sorted.org.nz/tools/investor-profiler. Note that even the lowest category does not mean a risk-free investment, and there are other risks (see "Other specific 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 the five years to 31 December 2025. While risk indicators are usually relatively stable, they do shift from time to time. You can see the most recent risk indicator in the latest quarterly fund update for these Funds (once available). ### General investment risks Some of the things that may cause a Fund's value to move up and down, which affect the risk indicator, are: **Investment return risk** – you may not receive the returns that you expect, and the capital value of your investment may end up less than originally invested (or may be lost in full), because the market value of the assets owned by the Fund(s) can move up or down. **Manager Specific risk** – risk relating to us as a company and the risks around how we manage and operate our business, including the making of investment decisions. This includes our company specific risk (changes to our operations and ownership structure), key personnel and service provider risk. **Currency risk** – for Funds that invest into non-NZ dollar denominated equities or bonds, currency risk may affect the value of investments due to movements in foreign exchange rates. The currency management policy (or hedging) for each Fund is detailed in the SIPO. **Performance risk** – past performance is no guarantee of future performance. There is a risk that a Fund may not achieve its investment objectives or provide the same level of historical performance in the future. ### Other specific risks **Concentration risk** – the Harbour Australasian Equity Focus Fund has a concentrated portfolio, meaning we may have large positions in companies that our investment team rate highly. This Fund is not as diversified as our other Funds on a number of holdings basis. This introduces a higher level of risk to the Fund. **Liquidity risk** – is the risk that you may not be able to fully realise your investment in a Fund when you need to. All Harbour Funds are exposed to liquidity risk to some degree, but some Funds may invest into assets that exhibit poor liquidity such as unlisted equity, unlisted property, or unrated bonds of investment grade quality. **Short selling risk** – Specific to the Harbour Long Short Fund, the Fund has the ability to short sell shares. Short selling shares involves borrowing shares from a third party and then selling them in the market. The intention when short selling is to buy the shares back later at a lower price, therefore making a profit. In theory, the upper limit on a share price is unlimited, hence the potential loss from short selling, and the consequent effect on Fund returns from the short positions is also unlimited. In certain circumstances, the lender of shares who we have borrowed from to facilitate settlement, may request return of their shares which would require the Fund to buy back the shares in market at a time not of our choosing which may result in potential losses. However, in practical terms, to mitigate this risk, the short positions are balanced with long positions which are generally more as a percentage of the portfolio than the short positions. Additionally, should there be an event such as a takeover offer, or other positive news flow, the share price movement would be limited to the magnitude of that announcement. **Stock lending risk** – Specific to the Harbour Long Short Fund, to facilitate the settlement of the shares the Fund has short sold, we are required to borrow shares from a counterparty. This counterparty often requires the Fund to post collateral in the form of cash or securities. This collateral acts as a form of guarantee that the shares borrowed by the Fund will be returned. The amount of the collateral can vary from time to time. The lender has the right to sell or lend the collateral to other parties. The Fund is exposed to the creditworthiness of the lender in returning the collateral back if an adverse event occurred, and may negatively affect returns if we were unable to obtain that collateral. **Securities lending** – The Harbour NZ Index Shares Fund, the Harbour Real Estate Investment Fund and the Harbour Sustainable NZ Shares Fund have the ability to implement securities lending. There is a risk that a borrower of securities fails to deliver equivalent securities on termination of a loan or that the contract relating to the lending will not be legally enforceable. Third-party borrowers may not have the same ESG approach as the Harbour Real Estate Investment Fund or the Harbour Sustainable NZ Shares Fund. While it is intended that securities can be called back to exercise voting rights if appropriate, it may not always be possible. **Exclusions risk** – Exclusions consistent with Harbour's ESG strategy may give rise to performance deviations against each Fund's applicable benchmark. The investment guidelines for the Harbour Sustainable NZ Shares Fund contain additional exclusions and may give rise to even larger deviations from the S&P/NZX Portfolio Index benchmark positions (which do not include such exclusions). More information on these and other risks we believe you should carefully consider before making your investment can be found in the OMI on Disclose. --- ## 5. What are the fees? You will be charged fees for investing in the Funds. Fees are deducted from your investment and will reduce your returns. If we invest in other funds, those funds may also charge fees. The fees you pay will be charged in the form of annual fund charges. Small differences in these fees can have a big impact on your investment over the long term. ### One-off fees There are no one-off fees. ### Total annual fund charges are made up of: | FUND NAME | MANAGEMENT FEE (ESTIMATE) EX. GST (IF ANY) | | PERFORMANCE FEE (ESTIMATE) EX. GST (IF ANY) | TOTAL ANNUAL FUND CHARGES* (ESTIMATE) EX. GST | |-----------|---|---|---|---| | | NET FEE (ESTIMATE) | OTHER FEES (ESTIMATE) | | | | Harbour NZ Core Fixed Interest Fund | 0.56% | 0.07% | N/A | 0.63% | | Harbour NZ Corporate Bond Fund | 0.38% | 0.07% | N/A | 0.45% | | Harbour NZ Index Shares Fund | 0.13% | 0.07% | N/A | 0.20% | | Harbour Sustainable NZ Shares Fund | 0.19% | 0.06% | N/A | 0.25% | | Harbour Real Estate Investment Fund | 0.64% | 0.08% | N/A | 0.72% | | Harbour Long Short Fund** | 0.81% | 0.18% | 0.23% | 1.18% | | Harbour Australasian Equity Income Fund | 0.81% | 0.22% | N/A | 1.03% | | Harbour Australasian Equity Fund | 0.96% | 0.11% | N/A | 1.07% | | Harbour Australasian Equity Focus Fund | 0.88% | 0.22% | 0.12%*** | 1.22% | \* **Total Annual Fund Charges (Estimate)**, in respect of a Fund, comprises estimates of the management fee, and if applicable, any performance fee (and any other fees as detailed in the OMI), expressed as a percentage of Net Asset Value of the Fund. **Other fees (Estimate)**, in respect of a Fund, comprising from the proceeds of the management fee, an estimate of applicable underlying fund administration and supervisor costs notionally attributable to the Fund and, for the purposes of this table only, includes other costs in addition to the management fee such as legal and audit expenses, in aggregate expressed as a percentage of Net Asset Value. All fee percentages detailed have not taken into account GST, as applicable. Actual charges for the most recent financial year are available in the latest fund updates. \** In our fund updates, we will compare the Harbour Long Short Fund's performance against a market index that we consider reflects changes in the market value of the types of asset that the Fund invests in. However, the hurdle rate of return for the performance fee payable to us is based on the S&P/NZX Bank Bills 90-Day Index plus 2% per annum over the performance period. This means you may be paying a performance fee even if the Fund's performance (after fees but before tax) does not match or beat a market index which has more comparable assets. We have taken the average of performance fees paid over the past 5 years to estimate what the performance fee may be going forward. This may be higher or lower depending on relative performance for the remainder of the calendar year. The Fund fee, excluding