tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, May 6th, 11:32AM

News

rss
Latest Headlines

ING credit fund on the ropes

ING looks likely to close its Credit Opportunities Fund (COF) after worsening global debt markets have seen its unit price drop below 40 cents.

Tuesday, November 25th 2008, 5:00AM

by David Chaplin

According to an ING spokesperson, while the fund remains open, the COF is “being reviewed now”.

Yesterday research house Morningstar issued an ‘avoid’ warning – its lowest ranking – for the COF. The fund dropped 14% in October alone, Morningstar said, and “further substantial declines cannot be ruled out”.

“We believe that the risks for this strategy have intensified, because of continuing dysfunction in credit markets and the liquidation pressures building in this sector,” the Morningstar report says.

The fund invests in a range of underlying global credit managers, which make up about 70% of the fund, with the remainder in direct CDOs and cash. Morningstar said the COF losses were amplified by a high degree of leverage in the underlying funds.

The research house said similar funds have been forced to freeze redemptions and advised COF investors to get out while they could.

“We also have less confidence than we did a year ago in ING's ability to manage this kind of complex investment strategy. Investors in the Credit Opportunities Fund must provide a minimum 180 days' notice for Redemptions,” the Morningstar report says. “The time has come to do so.”

The COF launched in November 2006 but never proved as popular as ING’s other credit-oriented funds – the Diversified Yield Fund (DYF) and the Regular Income Fund (RIF) – with current funds under management of between $9-10 million.

Collectively, the now-frozen RIF and DYF garnered about $850 million from New Zealand retail investors but have now more than halved in value with current unit prices of about 39 cents and 49 cents respectively.

The ING spokesperson said both funds remained difficult to price accurately with no buyers for the underlying assets. He said the RIF and DYF, which are both 100% hedged, have also been hit by the falling NZ dollar.

“We have enough liquidity in the funds to cover the hedges,” the spokesperson said.

He said ING was also “still looking at options” to unlock funds for RIF and DYF investors with an announcement imminent.

« News Round UpSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • The death of the single adviser FAP
    “Since the release of transitional license statistics earlier, I've expressed the view on various platforms that the number...”
    2 hours ago by dcwhyte
  • The death of the single adviser FAP
    “I totally agree with Tony, there will be a period in 2022, where the knowledge of the changes in the financial advice becomes...”
    3 hours ago by Elephant1
  • Why PI insurance premiums are rising
    “Why do the PI insurers/underwriters not share their apalling NZ claims statistics with the industry? (20-40% price increases...”
    6 hours ago by Tony Vidler
  • Why PI insurance premiums are rising
    “From what I've seen and heard so far PI underwriters are using the nice round number method to price premiums. ...”
    1 day ago by Matron
  • Why PI insurance premiums are rising
    “I can only assume any reference to increasing claims are either outside of NZ or are settled privately as I’m not hearing...”
    1 day ago by John Milner
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.25 2.59 2.89
ANZ 4.44 2.85 3.19 3.49
ANZ Special - 2.25 2.59 2.89
ASB Bank 4.45 2.25 2.59 2.89
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▼2.25 ▼2.55 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼2.85 ▼3.15 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 ▼3.40 ▲3.64
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 ▼2.55 ▲2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.99 3.29
SBS Bank Special - 2.29 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 ▼2.25 2.59 2.79
The Co-operative Bank - Standard 4.40 ▼2.75 3.09 3.29
TSB Bank 5.34 3.05 3.29 ▲3.59
TSB Special 4.54 2.25 2.49 ▲2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼2.85 3.19 3.49
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - ▼2.25 2.59 2.89
Median 4.55 2.71 2.99 2.89

Last updated: 6 May 2021 10:51am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com