You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Absa closes money market fund

Worth more than R75bn.
Fund closes on July 6. Image: Mike Hutchings, Reuters

In a nondescript letter dated April 7, Absa informed investors in its Absa Money Market Fund (AMMF) that it is closing down the fund worth R75.47 billion.

Absa said the unit trust fund, which has been operating since 1997, would be wound up in terms of Section 102 of the Collective Investment Schemes Control Act and be closed on July 6.

The bank gave no reason for why it opted to close the fund down but hinted that some of its investors might have been using it as a bank account – something it was not meant to be used as.

The letter reads:

7 April 2021

Absa Money Market Fund Closure

Dear Client

Absa is committed to providing all of our customers with the best experience and financial products. To this end, we regularly assess all our products to ensure that they are aligned to our customers’ needs and expectations.

Absa Fund Managers recently reviewed the Absa Money Market Fund (AMMF) and established that the majority of the retail client population sampled, believe that the AMMF capital and its associated returns are guaranteed by Absa Bank. However, the AMMF is not a bank account – it is a collective investment schemes product (also known as a “unit trust”) and therefore capital and returns are not guaranteed. We have therefore decided to close the AMMF as of 6 July 2021 (the closure date), in the best interest of our clients, and given our findings that the majority of retail clients believe that their capital and returns are guaranteed.

The closure is a winding-up process, which in terms of Section 102 of the Collective Investment Schemes Control Act, requires the selling of your share of the fund and paying the proceeds to you. We will therefore, as part of this process, pay out your funds in the AMMF to you, on or before the closure date.

As an investor in the AMMF you can switch at any time, with the cut-off date for switching being 1 July 2021 and the wind-up date being 6 July 2021.

Therefore, you now have 90 days from the date of this letter within which to:
– withdraw your funds directly into one of your bank accounts, or
– speak to a financial advisor should you wish to easily switch your funds to any of our other financial products, or
– after 90 days, conveniently and safely be transferred to an Absa investment bank account in your name, the details of which are outlined below:

Absa investment bank account

• Your account number will remain the same.
• We will seamlessly transfer your AMMF investment to ensure uninterrupted returns.
• The interest rate on this investment bank account is currently 4.5%* p.a. which is equivalent or better than what you are currently receiving from your AMMF investment.
• All Absa bank accounts are guaranteed by Absa.
• When you access this account, your current Absa card will continue to work as before.
• You can also still transact on your account through Absa branches, Online Banking and ATMs using your current card.

Due to the Covid-19 pandemic, we recommend the use of any of our digital channels detailed below to communicate your choice. We are on standby through our various channels to provide any assistance you may require during this time, including financial advice.

Please do not hesitate to:
• Visit our web site https://www.absa.co.za/mmfclosure.
• Log onto Online Banking or the Absa Mobile App to make your choice.
• Visit your nearest branch to discuss your options with your banker or financial advisor.
• Call us directly on 0860 111 515.

COMMENTS   10

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Absa is a goner.

I bet Bitcoin is doing much better than anticipated. WITH LESS COSTSSSSSSS!!!!!!!!!!!

XRP – up 40% in a day. What’s not to love?

What can go up 40% in a day can surely go down by the same or even more.

…then why not place your pension life savings in crypto?

This action by Absa has motivated me to at last move my funds elsewhere.

Matter of time before this bank closes its doors.
On the customer count … they definitely bleeding

got this “announcement” out of the blue from absa just via e-mail of the money market account’s closer – seems the bank guaranteed part became too difficult for absa; 85 year old father-in- law with no email / pc, does not know of such decision yet.

A most bizaare decision.Hot on the heels of the article last month that Absa is bleeding customers.Instead of asking advisors to be proactive and offering clients low risk alternatives or just embarking on further communication with clients.remember rates are also scheduled to go up at some stage.

Am I missing something or is this some new ‘business madness’ to go along with our ‘political madness’?

“the best interest of our clients, and given our findings that the majority of retail clients believe that their capital and returns are guaranteed”

What a load of twaddle!!! A sleight of hand move

Blame the client for not understanding the product advised(mostly by the internal brokers) and shift the cash to become a bank deposit to meet and/or increase bank liquidity requirments

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles: Advanced Search
Click a Company: