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RaboDirect
 

Managed Funds FAQ's

Frequently asked questions

What are Managed Funds?

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With managed funds, your money is pooled with a number of other investors and then invested by an experienced fund manager. We have over 40 different managed funds that invest in a wide variety of assets including bonds, property, equities, infrastructure and commodities.

Each time you invest in a managed fund you will be issued with 'units' which represent your share of the fund. Each day the fund manager produces a 'unit price'. As this unit price goes up or down, so does the value of your investment. 

Managed Funds are also a Portfolio Investment Entity (PIE) which means that tax is capped at 28%. 

What is the Portfolio Investment Entity (PIE) regime?

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This regime provides a more reasonable method of taxation for PIE products. 

Income from PIE products is now attributed to its investors, based on their share of the investment, and taxed at their individual Prescribed Investor Rate (PIR). 

As the maximum PIR is 28%, PIE products provide major tax benefits to investors who are usually in the 30% or 33% tax brackets. 

Prior to the 1 October 2007 when this PIE regime was introduced, investor's earnings were taxed at the company tax rate of 33%. 


How do I purchase Managed Funds?

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Already a customer?

Step 1: Purchase funds

  • Log into RaboDirect
  • Click on 'PIE Funds', then 'Buy Funds'
  • Click on 'Buy' next to the fund you wish to purchase

Please note: Before you can purchase managed funds your money needs to be cleared and in one of your RaboDirect Savings Accounts; it will take 2-3 business days to clear once we receive it.

The first time you purchase funds you may be prompted to open a Managed Funds account.

Step 2: Processing

After your order has been placed online, it is sent to the fund manager for processing at the next relevant cut-off time. To view the RaboDirect cut-off and fund manager processing times for the fund you are purchasing, please see the FAQ 'When are your buys/sells completed?'

Not a customer yet?

Simply follow our online application steps and open a Rabosaver account. Once this is complete and your initial deposit is transferred with the reference 'Verify' in the payment field, your Welcome pack should be issued and you will be able to log in and follow the above steps.

How do I sell Managed Funds?

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  1. Log in to your RaboDirect account
  2. Click 'PIE Funds'
  3. Click 'Actions' next to your Managed Fund account and select 'View portfolio'
  4. Click 'Actions' next to the fund you wish to sell
  5. Select 'Sell units'
  6. Enter the details e.g. amount of units
  7. Confirm the sale with your Digipass
We will then send your order to the fund manager for processing.

See the FAQ 'When are purchase and sale orders completed?' for our cut-off times and the fund manager processing times.

When are purchase and sale orders completed?

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See our table below for the processing frequency, order cut-off time and processing times for the different fund managers.

The processing time starts when we send your order to the fund manager and ends once your unit holdings are updated, and the buy/sell amount is debited or credited from your savings account. 

Cash Advantage Fund

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ Same day


AMP Capital

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 3 days


ANZ Investments

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 3 days - All sales • 4 days - All buys


Elevation Capital

Processing frequency: Monthly | RaboDirect cut-off time 12:30pm (2 business days before the last business day of the month) | Fund manager processing time^ 10 days (depending on when buy/sell order is placed this means total time until settlement could be up to 41 days)


Devon

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 3 days


Fisher Funds

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 2-3 days


Harbour

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 3 days


Mint

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 3 days


Nikko

Processing frequency: daily | RaboDirect cut-off time 12:30pm | Fund manager processing time^ 4 days


Pathfinder

Processing frequency: daily | RaboDirect cut-off time 12:30pm (2 business days before the last business day of the month) | Fund manager processing time^ 10 days (depending on when buy/sell order is placed this means total time until settlement could be up to 41 days)


Russell Investments

Processing frequency: daily | RaboDirect cut-off time 10:30am | Fund manager processing time^ 4 days



*Trade requests only processed by RaboDirect on business days.
^These are standard processing times. Actual processing times may vary from this.

Place your order at least 15 minutes before the RaboDirect cut-off time to make sure it is sent that day. The unit price shown when you buy/sell units online is indicative only, so the unit price you receive at settlement may differ.

How do I know if my order has been completed?

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  1. Log in to your RaboDirect account
  2. Click 'PIE Funds' 
  3. Select 'View portfolio'’ from the 'Actions' menu

If there is a pending order you will see a 'P' (purchase) or 'S' (sale) icon in the 'Orders' column. Click 'Actions' then 'View transactions' to view completed orders. 



Can I change or cancel a Managed Funds order?

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If an order has not been sent to the fund manager for processing, it can be cancelled online. To change an order, you would need to cancel it and create a new one. 
To view a pending order:
  1. Log in to your RaboDirect account
  2. Select 'PIE Funds' from the menu at the top of the page 
  3. Click the 'Actions' button and select 'View pending orders' 

If the order hasn't been sent for processing, it can be cancelled by clicking 'Actions' then 'Cancel order'.

It is not possible to cancel an order once it has been sent for processing.

How is tax paid?

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PIE tax is deducted in two instances:
  1. When you sell units
    The tax liability (for the current tax year) will be automatically deducted from the proceeds of the sale and paid to Inland Revenue on your behalf.
  2. At the end of each tax year (31 March)
    We will deduct any outstanding tax liability and pay this to Inland Revenue on your behalf.
This process works as follows:

We calculate your overall tax position (on a per fund basis) and credit your RaboSaver account in the event of a rebate, or debit it if there is a tax liability.

For a tax liability, we will follow these steps:
  1. Your RaboSaver account will be debited for the amount of tax owed.
  2. If there are insufficient funds, your account will be overdrawn and we will contact you to arrange an account top-up.
  3. If we cannot contact you we will sell units in the relevant fund/s, to meet your tax liability and cover the overdraft.
We will send a secure message to advise the amount owed and when this will be debited.

For more information, see our PIE Tax FAQs.


Do my Managed Funds pay distributions?

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The following Managed Funds pay distributions:

  • Devon Australian Fund – 6 monthly (end March/September)
  • Devon Dividend Yield Fund – Quarterly (end March/June/September/December)
  • Devon Trans-Tasman Fund – 6 monthly (end March/September)
  • Elevation Capital Value Fund – Annually (end March)
  • Harbour Australasian Equity Income Fund – Quarterly (end March/June/September/December)
  • Harbour NZ Corporate Bond Fund – Quarterly (end March/June/September/December)
  • Harbour NZ Core Fixed Interest – Quarterly (end March/June/September/December)
  • Nikko AM Concentrated Equity Fund – 6 monthly (end March/September)
  • Nikko AM Core Equity Fund – 6 monthly (end March/September)
  • Nikko AM Global Bond Fund – Quarterly (end March/June/September/December)
  • Nikko AM Income Fund – Quarterly (end March/June/September/December)
  • Nikko AM NZ Corporate Bond Fund – Quarterly (end March/June/September/December)
  • Nikko AM NZ Bond Fund – Quarterly (end March/June/September/December)
  • Russell Investments Global Fixed Interest Fund – 6 monthly (end March/September)

Distributions are always paid into the RaboSaver account.

How do I change my PIR?

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You can change your PIR rate at any time by logging into RaboDirect and clicking 'My Rabo', then 'Tax details'.  From this page click the orange 'Actions' button and then 'Change tax details'.

What fees will I pay for managed funds purchases?

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RaboDirect charge a 0.75% entry fee for all managed fund purchases. This is reduced to 0.50% if you set up and make these purchases by Regular Investor Plan

Fund managers will also charge their own fees such as management and performance fees. See the relevant Product Disclosure Statement to find out the fees that each manager and fund charge.