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Guardian to restructure cash fund for guarantee

Guardian Trust has decided to close and restructure its CashPlus Fund so that it can apply for the government’s deposit guarantee scheme.

Wednesday, November 5th 2008, 9:46PM
The main change is that the restructured fund will only hold cash investments. It will separate out its investment in mortgage units.

“Once this is done and the fund is approved for the Crown deposit guarantee scheme, investors will benefit from the added security,” the company says in a statement.

“The balance of the fund, held in mortgage units, will enjoy a guarantee from Guardian Trust as to capital.”

Guardian Trust managing director Sean Carroll says the fund has been suspended for 35 days to enable the process to be executed.

“Our position is that if a government guarantee is available, the most responsible course of action is to seek that guarantee,” Carroll says.

Around two-thirds of the fund is held in cash or registered certificates of deposit from a spread of New Zealand-registered banks. The remainder is comprised of mortgage units, which will be moved to a separate fund, capital guaranteed by the company.

The new, separate capital guaranteed mortgage unit fund will be closed to new investments and redemptions for the protection of investors, during this period of market instability. It is the intention of the company to liquidate these units as soon as market conditions permit.

“This restructure is an assertive action for the protection of all investors, and is consistent with the prudent approach Guardian Trust has always taken to its investors’ interests,” Carroll says.

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