The ASB Bank yesterday unveiled plans to expand its client base with an investment fund targeted at charities.
One of the first of its kind designed by a nationwide bank, the two non-taxed specialist investment vehicles will be available to charity clients and aim to yield higher returnsthan traditionally-favoured term investments.
Wholesale business markets manager Richard Flinn says the ASB Bank currently has about 11,000 charities on its books and is hoping to widen its net to serve a greater number of the estimated 30,000 t0 50,000 charities operating.
He says with interests rates falling on term deposits, charities have been forced to rethink fixed-rate investments but often lack the expertise to risk savings on the stock exchange.
Of the two vehicles, an Income Trust will be tied to the fortunes of 90-day bank bills, government stock, high quality corporate debt and international bonds while the Growth Trust will track the market indices of domestic and international shares.
The bank is plugging the scheme as also allowing charities to comply with the Trustee Amendment Act, which specifies investments by charities must be suitably diversified.
ASB Bank will take management fees of up to 0.7 per cent depending on the size of investment, which Mr Flinn says is much lower than the 1.3 to 1.5 per cent for retail fund management.
