Definition
What is SIPO (Statement of Investment Policy and Objectives)?
The mandatory governance document for NZ managed investment schemes setting out the scheme's investment philosophy, asset allocation ranges, and decision-making process.
A Statement of Investment Policy and Objectives (SIPO) is mandatory for every NZ managed investment scheme under FMCA Part 4. It is filed on the Disclose Register and serves as the manager's constitutional commitment to investors about how the scheme will be managed.
Required content (FMC Regulations 2014): - Investment philosophy and objectives — what the scheme is trying to achieve. - Strategic asset allocation — long-run target allocations across asset classes. - Tactical allocation ranges — minimum and maximum allocations per asset class. - Specific permitted investments — instrument types, geographic restrictions, ESG screens. - Performance objectives — typically a benchmark plus a margin (e.g. "OCR + 4% over a rolling three-year period"). - Risk profile description. - Hedging policy — currency and interest-rate hedge ratios. - Liquidity policy — what liquidity the scheme will hold, what gating provisions apply. - Conflicts management — how related-party transactions are handled. - Review frequency — typically annual, with the manager required to recommend any material changes to the supervisor.
Why SIPO matters more than the PDS for ongoing-manager assessment: the PDS describes the offer at point-of-sale; the SIPO describes how the scheme is run ongoing. Investors monitoring a scheme over time should track the SIPO for changes (which require supervisor approval and disclosure to investors) rather than re-reading the PDS.
SIPO changes are signals: a tightened hedging policy may indicate the manager's concern about currency risk; a widened asset-allocation range may indicate the manager wants flexibility for unusual market conditions; a new ESG screen may indicate the manager is responding to LP demand for sustainable investing.
Wholesale-only schemes: SIPO is required for licensed MIS managers regardless of whether they offer wholesale-only or retail-and-wholesale. Wholesale offers that operate outside the MIS regime (e.g. some Limited Partnership structures) do not have a statutory SIPO but typically have an equivalent investment-strategy document in their LP agreement.
Wholesale Investor NZ usage: SIPO URLs are tracked in funds.sipo_url where publicly available. Sonnet facts extraction reads SIPO documents alongside IM and PDS to populate the structured fact base.
Related Terms
Product Disclosure Statement (PDS)
The FMCA-mandated retail disclosure document for any regulated offer of financial products — limited to 12 sections and specific length per the FMCA Regulations 2014.
Information Memorandum (IM)
The wholesale-offer disclosure document used in place of a PDS — not statutorily prescribed but conventionally follows a similar structure.
Managed Investment Scheme (MIS)
A collective investment vehicle where investor funds are pooled and managed by a professional manager.
Disclose Register
The public register of regulated offers (retail Product Disclosure Statements, MIS Statement of Investment Policy and Objectives, fund updates) maintained by the Companies Office.
Educational Content Disclaimer
This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
Before making any investment decision, you should seek independent advice from appropriately qualified professionals. Wholesale Investor does not recommend or endorse any particular investment, strategy, or fund manager.