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AXA - Mortgage Fund Update

AXA - Mortgage Fund Update

AXA New Zealand has today announced the suspension of three mortgage funds, the Mortgage Distribution Fund, the Mortgage Investment Fund and the AXA Mortgage Fund.

The suspension is for 30 days. During this period AXA will not be accepting any new investments or requests for redemptions for these three funds.

AXA New Zealand Chief Executive Ralph Stewart says this action has been taken in response to an anticipated increase in redemptions from the funds following the Government’s announcement of bank deposit guarantees.

“These are very challenging times for investors and investor confidence has been severely tested by the global credit and banking crisis. This has prompted governments of countries around the world, including New Zealand, to introduce Deposit Guarantee Schemes,” says Mr Stewart.

“While the details of the New Zealand scheme are yet to be finalised, as this stage it appears that most managed funds will be excluded.

“As a result of the exclusion of managed funds we anticipate an increase in redemptions. We believe it is prudent to act early and to make the right decision in relation to investors in the funds.

“We believe the Reserve Bank of New Zealand is doing all it can to ensure the New Zealand Deposit Guarantee Scheme is fair for all investors, but we are now concerned that managed funds are largely excluded from the scheme.

“We must act in the best interests of all our unit holders. By temporarily suspending these funds we are seeking to ensure that all unit holders are treated fairly.

“We are working with the funds’ Trustees, the Public Trust and New Zealand GuardianTrust, and the Reserve Bank to explore all options available to the funds.”

The three funds have a combined $225 million invested. It is expected that the income distribution due to be made by the Mortgage Distribution Fund at the end of November will proceed as scheduled.

- ends -

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