AXA New Zealand's call centre was flooded with inquiries yesterday following its announcement it had frozen a mortgage fund to institutional investors.
On Monday, AXA became the fifth investment manager in as many months to suspend redemptions from a mortgage-backed security.
Wholesale investors will not be able to
make withdrawals from its Mortgage Backed Bonds fund for three months. The suspension does not affect retail investors.
Chief executive Ralph Stewart said it had hoped people would understand the announcement, but instead the fund manager got a lot of unrelated calls.
"Because we have near-on 300,000 customers in New Zealand all of them wanted to know that their insurance, their KiwiSaver, their superannuation is fine, which it is."
He said the number of calls related to the Mortgage Backed Bonds were "not too bad", and although he hadn't added up the number of redemptions for the day at the time of speaking to the Business Herald, he was encouraged that retail investors weren't panicking.
Although none of the fund's first-ranking mortgages are in arrears and there has been no run on funds, AXA made the decision to partially suspend it because of the rampant bad feeling about mortgage-backed investments. The aim was to preserve liquidity, it said.
Stewart said he hoped other fund managers with the structure to differentiate between wholesale and retail investors would look at doing the same. "I think just closing for retail investors gives people such a fright. If there is a chance to still have provision for special cases or programmed outflows it's great to try and keep it."
Meanwhile AXA NZ's parent company, AXA Asia Pacific Holdings, announced an 11 per cent rise in first half operating earnings to A$295 million ($375 million).
However after-tax profit fell 75 per cent to A$94.2 million.
Operating earnings fell in New Zealand, down from $30.6 million to $27.1 million.
Stewart said 55 per cent of AXA NZ's revenue came from insurance, and that had a good first half. However the rest of its revenue came from wealth management, and clearly as the capital markets had dropped since the start of the year AXA's income from that had been impacted.
