The company says that it has over-inflated the unit prices on five of its funds because of the way it valued its tax assets (which have come about because the funds have being making losses).
It had the choice of writing back the unit price and chasing people who have exited the fund for the money, or making up the difference.
In the end it has chosen to leave the unit price where it is and put in extra money to make up the difference. The $7 million is coming out of BNZIM’s reserves.
The five funds affected have about 30,000 unit holders. Two of the funds are the BNZ Balanced Fund and the BNZ Active Growth Fund. These funds hold a combined asset value of about $130 million. About 1% of this value is represented by the incorrect tax values.
The other funds are the Future Lifestyle Plan’s Conservative Growth Fund, Balanced Growth Fund, and Dynamic Growth Fund. These funds hold combined assets of about $300 million and it is estimated 2% of this value is represented by the incorrect tax values.
The company says there are no issues over how other assets held by the firm have been valued.
To protect the interests of all investors, BNZIM has temporarily ceased accepting contributions into the five affected funds and instigated a comprehensive review.
BNZ won the fund manager of the year awards presented last year by research houses Fundsource and Morningstar.
However, it has in recent months been in dispute with Fundsource over the way it handles tax assets in its funds.
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