KEY POINTS:
What is it called and what sort of savings product is it?
UDC Finance's Term Maximiser Fund is a managed fund under the new portfolio investment entity (PIE) tax rules.
What is the company behind it?
UDC is a subsidiary of the ANZ National Bank. It is New Zealand's largest finance company, and lends solely on plant and machinery.
Who is the target market?
UDC says it suits people in retirement, nearing retirement or saving for a particular goal.
What return does it offer?
Its opening rate is 9 per cent annually, with interest paid quarterly. For investors on a 39 per cent marginal tax rate, this is the equivalent of 10.68 per cent under the PIE regime.
When was it launched?
April 9.
What other products is it like or is it competing with?
UDC says its Term Maximiser Fund takes on all-comers, including term deposits and other finance company offerings.
Is it long term, short term or medium term?
Investments are made for a 12-month term, beginning on the first of each month.
What is the unique selling point of the product?
This is the first PIE-compliant fund from a finance company in New Zealand.
How strong a stomach do you need for it?
Mild. This term fund doesn't have a Standard & Poor's rating. However it invests in UDC's debentures, which have an investment grade AA rating from Standard & Poor's.
What's the hitch?
This is one of those products that doesn't have too many hitches. The main one is getting used to the new language of investing. Instead of making deposits and withdrawals, investors make subscriptions and redemptions. Another minor hitch is that investment terms start only on the first of each month.
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