AMP fund hiccup finally cured

More than 1,400 unit-holders in the $360 million AMP Investment World Index Fund (NZX:WIN) were affected by a tax processing error that left the fund's net asset value understated for months.

Thursday, January 7th 2010, 9:30PM

An AMP spokesperson said 1,447 current or former unit-holders have now been compensated with either cash or bonus units.

However, the allocation of bonus units was held up by another minor glitch when AMP mis-priced the initial issue. WIN was placed in a trading halt from December 30 until January 5, as AMP reprocessed the issue.

The original mistake, detailed in a waiver notice issued on Christmas eve, occurred in February, after WIN's administrator, BNP Paribas, failed to process tax information that would have added over $1.6 million to the fund's value.

The AMP spokesperson said the firm was "working closely with BNP Paribas to ensure the same mistake doesn't happen again".

AMP only picked up the omission in August with the tax information finally included in the WIN unit price on August 21.

"This in turn caused the WIN unit price to be understated by 45 to 78 basis points between 27 February and 21 August".

As a result investors who bought and sold units during that period received the wrong price.

On October 19 AMP adjusted the WIN unit price to take account of a provision to compensate affected investors. This move created further problems for investors who traded the fund between August 22 and October 19. WIN agreed to compensate investors who suffered a loss of $5 or more during this period with extra units to the tune of $25,800.

However, AMP Capital paid WIN $24,800 in cash to compensate for losses the fund made in overpaying investors who sold units between August 22 to October 19.

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