Rutherford Rede reckons master trusts are dead

Just as everyone starts launching master trusts one of the long term uses of these vehicles pronounces them dead.

Monday, August 31st 1998, 12:00AM

Master trusts are dead according to Rutherford Rede director Peter Christensen.
Christensen says master trusts have a number of disadvantages, including being ineffective from a tax perspective.
He is unwilling, at this stage, to detail the group's other concerns about master trusts, but will do so at a later date.
Rutherford Rede is currently transferring its clients from the New Zealand Funds Management Strategic Investment Service to a new system it has developed.
The "engine" to the new system is the National Australia Bank-owned AUSMAQ system, Christensen says.

The interesting part of the new structure is that Rutherford Rede has dismantled the traditional funds management operation and up it back together in such a way as the planning firm has more control over the various elements.
It has done this through a company called Rutherford Investment Services (RIS) which is a joint venture between Rutherford Rede and former banker Alan Yeo. RIS's chief investment officer is former NZ Funds staffer Matthew Walker.
Christensen says RIS has taken stripped the funds management business into its core components, including cash management, registry and custodial services and rebuilt them. That means the planning firm, which owns the company, has more control over the system.
Essentially RIS manages the funds management process within the structure, organises the research and liaises with Ausmaq.
The new Rutherford Rede system also distinguishes itself by the narrow range of products that are included in its menu and the direct holdings of some securities.
New Zealand equities are held directly, and RIS manages the New Zealand fixed interest exposure.
BT Funds Management and the AMP World Index Fund are used for international equities, and there are no property holdings. BT also gets the nod for international fixed interest and Bank of New Zealand deals with cash.
United States-based Ibbotson and Associates provide Rutherford Rede with asset allocation advice.

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