It's not every day that a fund manager decides to close the biggest money market fund in the country. Now, Absa will be hoping that it can hold on to those funds.
Absa Fund Managers plans to close its R80-billion money market fund, the biggest in the country and one of the oldest.
The simple reason, says Sylvester Kgatla, the head of Absa Fund Managers, is that the majority of Absa clients believe that the capital within the Absa Money Market Fund (AMMF) and its associated returns are guaranteed by Absa Bank.
"The AMMF is not a bank account," he says. "It is a collective investment schemes product, also known as a 'unit trust', where capital and returns are not guaranteed."
As a consequence, he says, "we have elected to close the fund as of 6 July 2021 in the best interest of our clients".
The closure of the fund is a winding-up process that will see Absa Fund Managers liquidate the fund and pay the proceeds to its investors. Investors have the choice of investing in a new Absa Prudential Money Market Fund, also managed by Absa Fund Managers, or simply having the money...