Challenger, as responsible entity of the Challenger Howard Wholesale Mortgage Fund (ARSN 093 720 159)(Fund), wishes to advise that on 21 October 2008, the withdrawal process for the Fund was amended. As a result, investors will only be able to withdraw from the Fund if we make an offer of withdrawal.
While there is no obligation for us to make a withdrawal offer, our current intention is to make quarterly withdrawal offers. At the time of making such an offer, we will write to investors to explain the process for submitting their withdrawal request and to inform them of the total amount available for withdrawals. If withdrawal requests submitted exceed the amount available for a particular offer, then requests will be satisfied proportionally in accordance with the Corporations Act. We will notify investors as soon as our generally applicable withdrawal process recommences.
Background
As has been widely reported, the past 12 months has been a difficult time for investment markets with significant impacts on many investors. During this time the Fund has continued to deliver strong returns and capital stability.
In recent times, as many investors reduced their exposure to managed funds such as the Challenger Howard Wholesale Mortgage Fund, we have been managing liquidity in the Fund through prudent management of mortgage maturities.
However, since the Federal Government's announcement of its decision to guarantee bank deposits, redemptions have increased to a level that we are unable to meet through the Fund's available sources of liquidity. It seems that an unintended consequence of the announcement is the creation of concerns amongst some investors about the security of income investments not covered by the guarantee.
Challenger, as responsible entity for the Fund, has given careful consideration to the most prudent way to protect the interests of all unitholders. In light of the current circumstances, the responsible entity has decided to temporarily amend the withdrawal process for the Fund.
The temporary change in withdrawal policy has been designed to protect the interests of all unitholders and to ensure that all unitholders are treated equally.
What this means for investors
After the conclusion of each quarter (31 December, 31 March, 30 June and 30 September) we will offer a total amount for withdrawals from the Fund, based on our estimate of the available liquidity in the Fund available at the time. We will advise investors of the amount available for withdrawal each quarter. Should we receive withdrawal requests in excess of the amount available then we will notify accepting unitholders of pro-rata payment adjustments.
Importantly, this temporary change to withdrawal procedures has no impact on investments within the Fund and no impact on the monthly distributions from the Fund.
If investors' distributions are currently being reinvested in the Fund and they wish to have their distribution paid to their financial institution account, they can complete the Change of details form and return the form to Challenger. Only change of details received before 31 October 2008 will be reflected in the October distributions.
Despite these challenging conditions we remain confident that the Challenger Howard Wholesale Mortgage Fund will achieve its investment objectives over the suggested one-year investment horizon. We continue to actively manage the Fund to maximise future returns in order to meet these objectives. Please refer to the Challenger Howard Wholesale Mortgage Fund investor update for more information on the Fund and its investments.
Further information
We will keep investors informed of any developments as they occur. We have also created a frequently asked questions document to help you understand the changes.
However, if you have further questions or would like additional information, please contact your financial planner or call our Investor Services team on 13 35 66, during Sydney business hours.
Updated documents
Wholesale PDS
IDPS PDS
Investor letter sent 24 October 2008
Frequently asked questions
Amended withdrawal process guide
Challenger Howard Wholesale Mortgage Fund investor update
Change of details form
For more information contact your financial planner or call our Investor Services team on 13 35 66.
Interests in the Challenger Howard Wholesale Mortgage Fund are offered by Challenger Managed Investments Limited ABN 94 002 835 592 AFSL 234668.
The offer or invitation to subscribe in interests in the product is only available to persons receiving the PDS in Australia and is subject to terms and conditions described in the PDS. Neither product issuer, any Custodian, nor any entity or person associated with the Challenger Financial Services Group of companies guarantees repayment of your capital or the performance of your investment.
The information contained above has been prepared without taking account of any person's objectives, financial situation or needs. Because of that, each person should, before acting on any such information, consider the appropriateness of the information, having regard to their objectives, financial situation and needs. Each person should obtain a current PDS relating to the product and consider that document before making any decision about the product.
If you acquire or hold one of our products, we will receive fees and other benefits which are generally disclosed in the PDS or other disclosure document for the product. We and our employees do not receive any specific remuneration for any advice provided to you. However, financial advisers (including any Challenger group companies) may receive fees or commissions if they provide advice to you or arrange for you to invest with us. Some or all of Challenger group companies and directors of those companies may benefit from fees, commissions and other benefits received by another group company.
