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DrBob

Unit Trusts And Pension Funds

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It isn't often that an important piece of international economic news comes from New Zealand, but yesterday withdrawals were frozen from two consumer investment funds from ING:

ING forced to put freeze on two funds

5:00AM Thursday March 13, 2008

Investment manager ING has been forced to suspend withdrawals from two of its funds in one of the global credit crunch's first direct hits on Kiwi investors.

The indefinite suspension of withdrawals
from the $353 million ING Diversified Yield Fund and the $168 million ING Regular Income Fund is
effective from today.

One investor who had tried to get her money out of the Regular Income Fund instead received a letter from ING informing her of the suspensions. "The fund has experienced an unusually high level of withdrawal requests in recent months," ING wrote. The 85-year-old woman put $300,000 into the Regular Income Fund 18 months ago and has since lost $60,000 on the value of her investment. "I thought I'll get out of it while the going's good." The woman said it was "maddening" that she was now being forced to ride it out.

The funds' portfolios are made up largely of Collateralised Debt Obligations (CDOs) and Collateralised Loan Obligations (CLOs), financial products which package bank loans and other types of debts into securities.

The suspension of withdrawals from the funds has angered retired investor Eddie Graham. He and his wife had asked their ANZ financial adviser for a low risk, diversified portfolio. He ended up with money in the ING Diversified Yield Fund, which he has lost $23,000 on. Eddie wants to contact other investors in the Fund and take action.

These funds were from a major international investment firm and were marketed to the public as "low to medium risk". The crisis is clearly spreading beyond hedge fund investors to Joe Public.

I suspect many other 'low-risk' income and yield unit and investment trusts have large CDO exposures, not to mention pension funds. Expect similar withdrawal freezes to come to a shore near you...

Protect your house deposit!

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The suspension of withdrawals from the funds has angered retired investor Eddie Graham. He and his wife had asked their ANZ financial adviser for a low risk, diversified portfolio. He ended up with money in the ING Diversified Yield Fund, which he has lost $23,000 on. Eddie wants to contact other investors in the Fund and take action.

The thing is Eddie didn't know or understand what he was buying , and i doubt his advisor understood it either , he just wanted a high yield but with little or no exposure to stocks but what he got instead was exposure to sub prime :ph34r:

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The thing is Eddie didn't know or understand what he was buying , and i doubt his advisor understood it either , he just wanted a high yield but with little or no exposure to stocks but what he got instead was exposure to sub prime :ph34r:
These funds were from a major international investment firm and were marketed to the public as "low to medium risk".

A case for suing surely as they were mis sold?

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A case for suing surely as they were mis sold?

Probably. ING Diversified Toxic Sludge Fund and ING Radioactive Income Fund would probably have been more descriptive labels.

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  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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