6 Nov 2008

Guardian Trust seeks coverage under Govt guarantee

11:00 am on 6 November 2008

The Guardian Trust is moving to restructure one of its funds to qualify for the Government's deposit guarantee scheme and offer added protection to investors.

To meet the scheme's requirements, it has suspended a $160 million CashPlus Fund and will split its assets to create a fund that holds cash and cash deposits.

The remainder, which is made up of mortgage units, will be moved into a separate fund, of which the capital will be guaranteed by Guardian Trust.

Guardian Trust says the cash component makes up 65% of the CashPlus Fund.

Managing director Sean Carroll says he thinks the Reserve Bank will accept it.

He says market turbulence means the new mortgage unit fund will be closed to new investments and redemptions. Guardian Trust intends to liquidate these units as soon as market conditions permit.

The Government's deposit guarantee scheme was announced on 12 October.