The RaboPlus Cash Advantage Fund & the Deposit Guarantee Scheme

Mike, maybe you should go back and correct your own blog entry of 17 October where you said "One of our early interpretations of the scheme was that Cash PIEs were covered, however we were not certain until subsequent updates to the details of the scheme were released, which have provided more clarity around that and yes they are covered by the scheme.". I took that at face value and acted on it, so I am not impressed at all to find that it was wrong.

Dave, my apologies for any inconvenience I may have caused, clearly that was not my intent.

As you will no doubt know, when the deposit guarantee was announced it went through a number of iterations before arriving at it’s current version. For me the priority was to keep all customers informed and to communicate the details around the guarantee as per those published by the Reserve Bank/Treasury. We received an extremely high number of calls and e-mails asking us for details on the scheme and what it really meant. Are you saying that you invested in or divested from the Cash Advantage Fund based upon my earlier posts?

I'm flabbergasted by this post. You said very clearly on 17th October that "... and yes they are covered by the scheme".

Since then I have believed that the CAF was covered, and now you say "remain very confident".

I'll be sure to add loads of grains of salt to anything else you post.

I also invested in a PIE scheme based on that publication. There is very little information about the DGS and PIEs so the blog post proved to me that it would be covered. It also clearly states that funds are deposited with AAA rated Rabobank, and that Rabobank is covered by the DGS . If even the 'experts' get it wrong, how are the rest of us supposed to decipher it. Just hope nothing goes wrong in the next few months.

Peter, as at the 17th of Oct I was simply repeating what the Government/Treasury said re collective investment schemes. Subsequent to this, and I can only assume after they had looked into it further, did the Government/Treasury change their view and therefore the criteria for collective investment schemes. Apologies if this has caused any inconvenience.

Rob, the funds for the Cash Advantage Fund (CAF) are deposited with Rabobank NZ so are covered by the AAA ratings from both Moody’s and S&P, both of which have reaffirmed these ratings in the past few weeks. Plus they are covered by the deposit guarantee from our parent, the only major bank in The Netherlands to have not required financial assistance from the Dutch Government as a result of the “credit crisis”. Once again by simply quoting what the Government/Treasury had publically stated, my intention was to keep everyone up to date with the latest updates, and I apologise for any confusion this may have caused with the subsequent change in policy by the Government/Treasury.

Can you explain what actually happens when a guaranteed finance organisation goes belly up. How long will it take before the investor gets his capital back ie could it be years while the receivership process drags on? What about arrears of interest prior to and subsequent to failure?

Dermot, the one question I can answer is that the investor’s interest and capital are covered by the guarantee. With regards to the process issues can I please suggest you review the FAQs on the Treasury site as they should be able to shed more light, or alternatively they have posted a series of Documents on their site which may cover the matter in greater depth. Merry Xmas.

I have just read the above blogs, and like the rest believed that money invested was a certainty.
I have two years to go before pension age and am relying totally on the returns to live.
It's bad enough when the continually dropping rates give me a pay cut, but please let's hurry up this Govt guarantee.
However I do think Dermot Curtis is being a bit pessimistic- perhaps he has been bitten before like many of us.

I see the first cash PIE funds have been covered by this scheme. Hopefully the CAF isn't far behind.

Ari we have been chasing the relevant authorities and hopefully we should see some movement in the coming days.

So any news yet???

Rob, based upon conversations we have been having with The Treasury we understand that it’s simply an issue with processing a backlog of applications, and hopefully ours will come to the top of the pile very soon. FYI – once the guarantee is approved it is back-dated to 12th Oct 2008 when it was announced. Regards Mike