More funds hit by bank guarantee
A growing list of Australian fund managers have been forced to amend their redemption process for their respective monthly income and mortgage funds, as nervous investors seek the security of bank deposits recently guaranteed by the Government.
Australian Unity joins the likes of Axa, Perpetual and Challenger in modifying its redemption process by introducing a quarterly capped facility, with redemptions paid within 21 days of the end of each period.
Previously, the redemption process provided for full withdrawals within five working days of receipt of a redemption request.
Australian Unity Investments head of funds management David Bryant said the industry’s response to redemptions recognises “our overriding responsibility to manage redemptions with the interests of all our investors in mind”.
Bryant said the decision will give all investors equal access to their investments in a co-ordinated manner, and the change “does not affect the distributions, which will continue to be paid by the funds, or the capital position of the funds”.
“Our decision comes after a turbulent week in local money markets, which has seen a flight of investors from many investment products which have similar characteristics to bank deposits, including mortgage funds and cash management trusts, as investors have sought the security of the Government’s recently announced guarantee,” Bryant said.
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