Money at Work

This week in Money at Work we review the National Bank's new PIE compliant cash fund.

Friday, April 4th 2008, 11:18AM
What is it called and what sort of savings product is it?
The National Bank Call Fund.

Who is the company behind it?
National Bank is part of the ANZ National group, which is the largest retail bank in New Zealand.

Who is the target market?
The fund is aimed at investors on the 33% or 39% tax rates who want a low-risk, tax-efficient cash fund.

What return does it offer?
Current return is 8.10% and the minimum investment is $5,000.

When was it launched?

March 31.

What other products is it like or is it competing with?
The fund is up against the growing number of cash PIEs coming into the market, including the Westpac one profiled in Money at Work last week. National Bank says its product also competes with the online call accounts and is the "next evolution" of these highly popular products.

Is it long term, short term or medium term?
This is a short-term savings vehicle.

What is the unique selling point?
The three key selling points are its PIE status, which is beneficial for people on marginal tax rates of 33% or more, the ease of access and its underlying investments. NBNZ says this is the first cash PIE which is integrated into its banking processes so customers can access it via the internet, phone and branches. Also this fund only invests in National Bank call deposits while other cash PIEs invest in a wider range of investments.

How strong a stomach do you need for it?
You can have a weak stomach and still feel ok.

What's the hitch?
One thing investors will need to get their minds around with these new cash PIEs is the terminology. No longer will you talk about deposits and withdrawals, rather it will be subscriptions and redemptions, as they are managed funds.

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