View more on these topics

Zurich plugs 4 per cent gap in money market funds

Zurich has used around £18m of shareholder cash to plug a 4 per cent hole in its fixed-interest deposit funds, which have a 15 per cent holding in mortgage-backed securities.

The £375m fixed-interest deposit pension fund has 10 per cent invested in commercial and residential mortgage-backed securities, while the £86.5m fixed-interest deposit life fund has almost 5 per cent in mortgage-backed securities and 2.5 per cent in other corporate floating rate notes.

The pension fund was also exposed to Lehman Brothers, but the holding was taken out after the bank collapsed in September with no loss to the fund, the firm says.

Both funds are managed by Threadneedle, which saw its own money market fund plunge 10 per cent last year.

Zurich says volatile mark to market values for these assets prompted it to dip into shareholder funds rather than inflicting falls in value on the funds’ investors, like other firms have done.

Investment management director Paul Wright says: “We are not obligated to support this fund but we have chosen to use shareholder money to protect these customers, many of whom are about to switch into an annuity. It is right and proper what we are doing. While we cannot make any promises going further I am happy with where we are at.”

The move follows a 3.6 per cent markdown of three of Zurich’s offshore money market funds in September, as a result of exposure to Lehman’s.

It also comes after Standard Life paid up £100m to compensate pension sterling fund investors who lost out after its shock revaluation saw 5 per cent wiped off the value of their holdings.


10% Of repos were from Rock

Northern Rock admitted one in 10 repossessions in the UK last year were from its books as it posted losses of 1.3bn for 2008. Up to 8,500 of its Together borrowers are in arrears and almost 3,000 were repossessed.

The order of things

During the last decade, we have undoubtedly seen a greater adoption of internet-based solutions as more and more advisers have switched to viewing and administering their clients’ investments online.

The changing world of professional connections

The Legal Services Act of 2007, which opened up the legal market to competition, has put the cat among the professional pigeons. In the words of a 2015 Law Society report on what the legal profession is likely to look like in five years’ time: “Business as usual is not an option for many, if […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm