Interim interest rate increased

At a recent meeting the Trustees considered the matter of the interim interest rate and resolved to increase the rate from zero to four and a half per cent with effect from 21 September 2000.

Members are reminded the interim interest rate is the rate that is paid to members who are closing their membership during the financial year. It is also a guide as to the performance of the scheme from 01 April until the time the rate is set.

Performance to 30 September

In the past members have been informed of the scheme's performance by the reporting of gross investment performance for each asset class compared to the benchmark performance for that asset class over the same period.

The Trustees are aware of comments that the reporting of performance in such a way was a little confusing and of little relevance. Accordingly from this point on the Trustees will report performance by making an after tax and expenses comparison of this scheme and other balanced fund Managers.

For the quarter ended 30 September 2000 Melville Jessup Weaver has published the following performance for other retirement savings providers in their 'Investment Manager Survey of Balanced units'. The Trustees thank MJW for allowing the scheme to use the survey results.

The after tax and expenses performance of the scheme is also included for comparison. The results in per cent are:

AMPHG Investors 3.0

ANZ Asset Mngt 1.8

Armstrong Jones 2.2

AXA/Alliance 2.6

Bank of NZ 3.0

Bankers Trust 2.0

Colonial First State 2.9

Guardian Trust 2.1

NZ Fire Service 3.6

NZ Funds Mng 1.9

Tower Asset Mngt 1.7

WestpacTrust 2.3

 

Average return 2.3

Index return 1.2.

The results confirm the view that the scheme is performing very creditably when compared against other retirement savings providers who provide balanced unit investments.

Members are reminded once again that investment performance should be judged over the medium to long-term and not short-term periods such as three months.

The performance set out above is for the general interest and information of members only.

Lost souls

Members are thanked for their help in tracking down Ross Brown. Thank you ! Any member who knows the current whereabouts of Garth Jackson, formerly of Timaru and more latterly of Australia please ask him to contact the scheme at one of the addresses set out below to update his current address.

Oops

Members are advised of an error that crept into the printing of the Trustees Annual Report for the year ended 31 March 2000.

On page 14 of the report in the Summary Financial Statements the correct amount of 'FSC Reimbursement' for 2000 should be $ 12, 947 and not $ 12, 9477 as printed.

Please accept our apologies for the extra seven that appeared.

Historical performance of the scheme

The Trustees of the scheme have often been asked for the scheme's after tax and expenses performance since its inception. Set out below is this performance compared to the rate of inflation for the period from inception until March 2000:

(The table included in Supernews has not been included here. If you require a copy of the table please e-mail the Scheme Secretary at bcdent@ihug.co.nz )

The comparison against CPI shows that one of the Investment Objectives of the scheme to 'achieve a net return in the medium to long-term, which is three per cent in excess of the rate of inflation' is being met comfortably. The above figures show the annualised long-term net return of the scheme is 7.125 %.

Changes to investment arrangements

In Supernews 55 some changes to the asset allocation and investment configuration were announced. The Trustees wish to advise that in September they resolved to manage the scheme's New Zealand bonds and cash through the ANZ Funds Management Wholesale Superannuation Scheme rather than holding individual assets with ANZ Asset Management. This change was finalised in early October.

This move to holding these assets in a superannuation scheme is seen by the Trustees as giving the scheme slightly greater diversification of the underlying assets in the NZ bond asset class.

Members are further advised that the changes to the asset allocation and investment configuration set out in Supernews 55 are being worked through with the Investment Adviser and the Investment Managers to finalisation in the near future.

Borrowing against your funds

Members are reminded that they are not able to borrow against the funds held on their behalf in the scheme.

The Trust Deed states:

'No person being entitled to any interest in any benefit payable under the scheme shall assign, charge, alienate or borrow against the security of any such benefit.

THE TRUSTEES WISH MEMBERS ALL THE BEST FOR THE COMING FESTIVE SEASON AND PROSPERITY FOR ALL IN 2001

BARRY DENT

SCHEME SECRETARY