Trustee closes mortgage fund

Tuesday 29th July 2008

Guardian Trust has decided to suspend new investments and withdrawals in its $249 million mortgage fund to protect investors.

The move is driven by liquidity issues. Currently the fund is �operating below its target liquidity rate of 5%.�

�In such conditions this is not considered appropriate,� the company says in a statement. �In the interest of fairness among unit holders, the directors feel a cautious approach is necessary.�

While a freeze has been imposed the fund is planning to continue distributions to its 3,700 investors.

This fund, established in May 1986, is a very conservative vehicle. It invests only in first mortgages, where advances are restricted to a maximum of 60% of valuations across the commercial, retail, industrial, farming and residential sectors.

The fund has performed well, over the years, in managed fund surveys and awards.

Managing Director Sean Carroll said, �Poor liquidity is a feature of today�s markets. We need to manage liquidity requirements very closely in funds such as these, where the assets (primarily mortgages) cannot be converted to cash quickly.

�As is usual for Guardian Trust, we are taking a cautious and prudent approach. We will review the situation regularly and will update investors and the market as appropriate.�

COMMENT: We've seen it all before but it still hurts

Comments from our readers

No comments yet

Add your comment:

Your name:

Your email:
Not displayed to the public

Comment:

Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

SkyCity Appoints Chief Financial Officer
February 13th Morning Report
February 12th Morning Report
NZME 2025 Full Year Results Release Date
Turners Institutional Investor Day
February 10th Morning Report
PEB - Medicare Contractor Novitas Schedules Expert Panel
NZK Enters Into Wellboat Lease Agreement
Fonterra announces Mainland Group leadership change
OCA - Oceania announces Director changes as part of Board refresh

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.