Published 29 October 2008
AXA NZ challenged the Government’s bank deposit guarantee scheme yesterday, freezing $225 million in 3 mortgage funds because it anticipates the Government scheme will result in an increase in redemptions.
AXA said it was suspending investment in and redemption from its Mortgage Distribution Fund, the Mortgage Investment Fund & the AXA Mortgage Fund for 30 days. But chief executive Ralph Stewart said AXA expected the income distribution due to be made by the Mortgage Distribution Fund at the end of November would proceed as scheduled.
Mr Stewart said: “While the details of the New Zealand scheme are yet to be finalised, at this stage it appears that most managed funds will be excluded. As a result of the exclusion of managed funds, we anticipate an increase in redemptions. We believe it is prudent to act early and to make the right decision in relation to investors in the funds.
“We believe the Reserve Bank is doing all it can to ensure the New Zealand deposit guarantee scheme is fair for all investors, but we are now concerned that managed funds are largely excluded from the scheme. We must act in the best interests of all our unitholders. By temporarily suspending these funds we are seeking to ensure that all unitholders are treated fairly.
“We are working with the funds’ trustees, the Public Trust & NZ Guardian Trust and the Reserve Bank to explore all options available to the funds.”
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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.