BNZ Investment Management reckons its come up with a winning product combination in the popular mortgage fund market.
It has, today, launched two identical mortgage funds, one which accumulates income and the other which distributes income.
The accumulation fund, the Mortgage Investment Fund, is a unit trust that was launched in 1988 and now has $253 million in funds under management.
This fund is taxed at 33% and returns are accumulated rather than distributed. BNZ Investment Management product manager Grant Hill says this type of fund will appeal to investors on a tax rate of 33% or higher and includes people looking to save for medium to long term goals.
He says people can on rates of 33% or maybe able to use it as a salary sacrifice vehicle.
The new fund, BNZ Mortgage Distribution Fund, is a group investment fund (gif) that will be managed the same way as the unit trust.
The idea is that the distribution fund will suit people on tax rates of less than 33% who want regular income. The beauty of the fund is that it will be able to make distributions at an investor's marginal tax rate because of its structure.
Hill says the offering is unique because there are the two funds side by side, and BNZ is the first bank to offer a gif which invests in mortgages.
He says the launch is timely given the strong investor interest in mortgage funds.
In the year ended 30 September 2001, New Zealand mortgage funds attracted in-flows of $575.8 million – an increase of 400% and 450% over the years September 1999 and 2000 respectively.
"We’re seeing an increase in interest in mortgage funds which may, in part, reflect the destabilising influence of September 11," Hill says.
BNZ won the
FundSource Fund Manager of the Year award last year, and is one of the three finalists for the top award from Morningstar which will be announced in just over a week's time.| « Major tax changes looming | Sovereign takes regulation bull by the horns » |
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