Tower's new Euro account

Investors are being offered the chance to benefit from volatility experienced by the new Euro currency.

Tuesday, June 29th 1999, 12:00AM

In what is a first of its kind in New Zealand Tower Managed Funds (TMF) is launching a Euro version of its popular FirstRate cash management account.
FirstRate has experienced phenomenal growth over the past year and a half due to the very competitive rates TMF have offered and because new features have continually been added to the fund.
The fund, which was launched three and years ago, now has about $130 million under management. The bulk of that money, $100 million, has been picked up in the past 18 months.

TMF already offer UK pound, US dollar and Australian dollar accounts and from July 1 will add a Euro version.
The Euro account offers investors the opportunity to invest in the common European currency. TMF says since the Euro was introduced on January 1 it has experienced enough volatility to provide a number of investment opportunities.
Also, TMF is making some changes to FirstRate in an attempt to cut down the level of transactions and keep the product competitive.
TMF says a number of unitholders are using the fund as a bank account, when it is actually designed to be used for short term (1-3 year) investments in cash securities.
"A number of clients however have seen it as a vehicle for paying their bills or buying the household groceries. As a result, the level of transactions per account has risen dramatically."
These transactions increase the costs of running the fund and therefore lower the interest rate offered.
To combat this TMF is limiting unitholders to a maximum of three free transactions each a quarter. A fee of up to $5 per transaction may be imposed on additional transactions in a quarter.
TMF says this fee level is broadly consistent with what major trading banks charge.
"If clients treat FirstRate like a bank account then they should expect to pay bank-type fees," TMF says.
The fees apply to withdrawals and additional investment made by automatic bank authority. Deposits by cash, cheque or direct debit are exempt.

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