Tower offers new trust

Press, 24 May 1988, Page 24

Tower offers new trust

Tower Trust Services, Ltd, a wholly-owned subsidiary of the Government Life Insurance Corporation which already manages three unit trusts, is offering a new unit trust — the Tower MultiSector Fund. Its objectives and strategy are capital appreciation for its investors through an aggressively managed portfolio of investments in the financial markets in New Zealand and overseas, and in property. The prospectus says that for the next few years capital gains will not be as readily achieved as in recent years. “Opportunities will be less widespread and will arise in different financial markets at different times — sometimes in the New Zealand Government Stock market, where capital gains can be made when interest rates fall, sometimes on Wall Street, in London or in Tokyo.

"Flexibility and speed, in

terms of being prepared and able to move funds between markets and between countries, will be key ingredients for successful money management over the next few years.’’ The prospectus says that initially the fund will be developed within the following parameters: in New Zealand, 10 to 50 per cent in fixed interest securities, 15 to 60 per cent in company shares, nil to 40 per cent in property, 5 to 20 per cent in cash, and overseas 3 to 10 per cent each in government bonds, shares, and cash. Initially the fund’s overseas holdings will be through Tower Global Fund. For the duration of this prospectus the fund will not go beyond these ranges. The prospectus does not state a termination date (the Trust Deed mentions 80 years less 2 days from the date of the deed — April 29, 1988).

The trust deed is made

between Tower Trust Services, Ltd, and the Public Trustee. The fund is allowed to borrow up to 50 per cent of its gross asset value. All units in the fund are of equal value, calculated daily. The net asset value of the fund is divided by the number of units on issue. However, the prospectus does not say on what basis units will be issued. The minimum initial investment is $2OOO, and this can be added to at any time with amounts of $5OO or more.

An initial fee of 5 per cent is payable to the manager to defray administration expenses and brokerage, and 0.7 per cent will be deducted from the amount subscribed to be retained by the fund. Ongoing charges, deducted direct from the fund, are 1.75 per cent of the gross asset value to the manager, and 0.1 per cent of the gross asset

value to the Trustee. In addition, certain other costs are charged direct to the fund. These include interest on any borrowing by the fund, audit fees, taxes, maintenance of accounting records and unitholder register, preparation and distribution of statements, notices, and investor bulletins, and “other normal expenses and outgoings of the fund.” Tower Trust Services, Ltd, offers investors in its trusts free switching of their investments in whole or in part to other Tower Trusts. The other three trusts are the Tower Global Fund, described as “for investors seeking an’offshore component in their portfolios,” the Tower New Zealand Equity Trust, which invests in N.Z. company shares, and the Tower Property Growth Trust, “a conservatively orientated investment in commercial property for longer-term investors.”