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AXA New Zealand has become the fifth investment manager in as many months to suspend withdrawals from a mortgage-backed investment.
Yesterday, it said institutional investors would be blocked for three months from making any redemptions from its $230 million mortgage-backed bonds fund.
Small private retail investors, who account for about half the money invested in the fund, are not included in the block.
The fund is based on first mortgages on good-quality commercial properties, and AXA hopes the move will slow snowballing negative sentiment about anything to do with mortgages.
Chief executive Ralph Stewart said AXA had decided to impose the suspension in the way it had because institutional investors would better understand it, and retail investors would hopefully be encouraged.
But the move was a "test case", and he conceded it might have the opposite effect and cause people to panic.
"I'm hoping people might see that ... what we've tried to do is preserve some liquidity for small investors," Mr Stewart said.
Last week, AMP froze withdrawals from its $419 million Capital NZ Property Fund, saying it was "in the best long-term interests of investors".
That fund also invests in quality commercial properties.
The move followed the suspension of withdrawals from the Guardian Trust mortgage fund, the Canterbury Mortgage Trust and the Totara First mortgage fund.
In April, Tower said it would close its $242 million Mortgage Plus fund.
