SBS Cash Pie Joins Guarantee Scheme

MEDIA RELEASE
13th February 2009

SBS Cash Pie Joins Guarantee Scheme

New Zealand’s newest bank, SBS Bank, announced the approval of the SBS Cash PIE under the Government’s Deposit Guarantee Scheme this week. As managed fund providers across the country push 100’s of collective investment schemes through the process of gaining approval under the Deposit Guarantee Scheme, the SBS Cash PIE is one of the first cabs off the rank. The investment fund is administered by SBS Bank’s managed funds subsidiary, Funds Administration New Zealand Limited (“FANZ”).

“We’re extremely proud to be one of just a handful of collective investment schemes included under the guarantee. The current world financial crisis means that there will still be some people who will feel uneasy about the stability and security of financial institutions. Today’s announcement will mean that investors will have certainty around their investments moving forward,” FANZ executive director Graham Duston said.

SBS Bank was one of the first institutions to be approved under the New Zealand Deposit Guarantee Scheme when it was introduced in October 2008, just weeks after achieving its bank registration status.

Mr Duston said the coverage would be welcomed by current and potential investors in the fund.

He also noted a change in investors’ attitudes over the last 12 months. The Cash PIE had always been focused on delivering a conservative, risk-adjusted level of performance to investors and this type of proposition had been increasingly sought by investors in recent times.

“Whether it is via our portfolio service, KiwiSaver proposition, or our managed funds, investors are telling us they are focused on “return of capital, not return on capital” at present. As a general observation, investors are now realising that if you lose 25% in an investment or a portfolio you have to make 33% just to get back to back to square one. A loss of 50% equates to having to make a 100% return to get back to square one. When you add in current equity market volatility combined with the many fixed interest defaults it’s a heart breaking situation for many investors.

“Our focus has always been on preserving capital wherever possible. Investors are now seeking more transparent and less complex investment propositions and organisations that delivered these types of investments would continue to find favour among investors,” he said.

ENDS

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