by David Chaplin
Currently the latest unit price for the Diversified Yield Fund sits at .9882, down from 1.059 on August 2. The Regular Income Fund dropped from 1.019 to .9862 from June 28 to 29 and again from .9905 on August 2 to its latest price of .917.
Giannoulis said the ING fund declines reflected uncertainty in the CDO market after losses in the US sub-prime mortgage market forced several hedge fund managers into difficulty, including Australian firms Basis Capital and Absolute Capital.
Last week the Macquarie-managed Fortress Notes, which has raised about $30 million from New Zealand investors, also announced its underlying debt portfolio declined about 5%.
Fortress has since sold off some assets to reduce its leverage - the fund borrowed $5 for every $1 invested. However, Giannoulis said ING had only an 8% exposure to the sub-prime market with "very little exposure to the [troubled] 2006 vintage".
"We also have no leverage or liquidity issues in the funds. We have $125 million in cash or near cash between the two funds," he said.
As well, there has been no rush on redemptions in either fund, according to Giannoulis.
"As it stands the two funds hold unrealised losses - if you sell out now you would only crystalise those losses.
Advisers generally understand that," he said. "As an institutional investor there are actually some good buying opportunities at the moment and we are looking at getting back into the market - it's just a matter of timing."
Giannoulis said until the latest drop the Diversified Yield Fund had achieved 47 straight months of positive growth.
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