“These are very challenging times for investors and investor confidence has been severely tested by the global credit and banking crisis,” said AXA New Zealand chief executive Ralph Stewart. “While the details of the New Zealand scheme are yet to be finalised, as this stage it appears that most managed funds will be excluded.”

AXA joins ING Australia, Colonial First State Investments and APN Property Group in Australia and New Zealand this week. Thirteen of Australia’s largest 20 funds have suspended withdrawals in the past week, prompting Treasury officials to call a meeting with fund managers in Canberra yesterday.

In the US, Morgan Stanley clients withdrew some US$46 billion from the firm’s money-market accounts last month, almost a third of their total deposits. The financial institution had to buy US$23 billion of securities held by the funds to keep them viable.

Stewart said AXA expects to make an income distribution due from the Mortgage Distribution Fund at the end of November as scheduled.

“By temporarily suspending these funds we are seeking to ensure that all unit holders are treated fairly,” he said. “We are working with the funds’ Trustees, the Public Trust and New Zealand GuardianTrust, and the Reserve Bank to explore all options available to the funds.”

The government this month guaranteed retail deposits held by banks, and non-bank deposit takers, imposing a scale of charges for lower rated firms.

BusinessWire.co.nz