Money Managers appeals to rate driven market

Money Managers has added a new trust to its FiRST STEP range that is designed for rate driven, fixed term investors. In that sense it competes with offers such as bank term deposits.

Tuesday, 26 July 2005

The difference between this trust, FiRST UP, and others trusts in the FiRST STEP series is that it is offering investors a projected return of 10%.

It is projected as opposed to guaranteed, as there are risks involved, such as a property market meltdown.

The fund is open until August 11, and after that investors are locked in until June 15, 2006. At that date they are given the option of rolling over into a new term or redeeming their units.

Money Managers says although the trust has a fixed date it technically has no term; rather it is an open-ended Australian unit trust.

Investors generally can’t redeem their money part way through the period, unless they obtain special authorisation from the trustee. If granted they may have to pay an early withdrawal fee of up to 3%.

"Provided the investment performs well (and we have no reason to think that it won’t), the unit price should steadily increase until 15 June 2006, when a bonus unit distribution is likely to occur," Money Managers says.

"Investors have the option of redeeming at this point. A further bonus distribution is likely to be made on 30 June 2006, for those investors who either remained invested, or new investors who went in during the 15 May 2006 to 15 June 2006 ‘window’."

Money Managers is projecting FiRST UP will raise around $20 million. The money raised will be on-lent to other trusts in the FiRST STEP range.

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