Challenger fund 'on hold'

fixed-interest/market-volatility/financial-markets/

20 October 2008
| By By Mike Taylor |

Ratings house Standard & Poor’s (S&P) has placed another fund, the Challenger High Yield Fund, ‘on hold’ after Challenger Managed Investments Limited made changes to redemption arrangements in the face of continuing market volatility.

S&P Fund Services analyst David Erdonmez said the ‘on hold’ designation had been applied to the High Yield Fund after Challenger announced that redemptions would be offered on a quarterly basis and would be subject to market conditions.

He noted that this was a change to previous arrangements under which Challenger met redemption requests within five working days and, under the constitution, was limited to a maximum of 30 days to make the payments.

Erdonmez said the high yield fund was not a traditional fixed interest offering as its investments were largely made up of hybrid securities, corporate debt and asset-backed securities.

“Due to the current volatility in financial markets the tradable market for these securities is not deep,” he said. “These conditions in conjunction with net outflows from the fund have resulted in the action being taken by the manager.”

He said S&P would be taking the opportunity to meet with Challenger during its upcoming review of Australian fixed interest funds.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS