PUBLIC TRUST

Hokitika Guardian, 13 September 1929, Page 5

PUBLIC TRUST

INVESTMENT OF MONEYS.

WELLINGTON, Sept. •!!

Public Trust investments on behalf of beneficiaries, were the subject of an explanation by the Prime Minister in the House to-day in reply to a question by Mr 11. S. S. Kyle (R., Ricca rton).

“The position,” said .the Prime Minister, “is that any one placing an estate in the Public Trust Office can direct that the funds be invested either (a) in the common fund, or (b) outside the common fund. “If the directions are to invest the funds of an estate in the common fund, thev bear interest immediately a,t a’ fixed rate of 51 per cent.' per annum, free of all charges. The Public Trustee -invests the whole of the moneys forming the common fund nt rates running up to six per cent. The average rate' earning is ; appreeiablv less than six per cent. The difference goes to provide for, '(a) State guarantee of principal and interest, (b) the cost of collection and management, (c) the risk of broken neriods of investment, ( 1) the liquidity 0 the common fund. \ “If the directions are to invest on .- side the common fund ,the restate receives the full rate of interest earned. If.es the usual commission, but takes the risk of any loss on realisation of security, and any loss owing to .noninvestment of the fund immediately, and of broken periods of investment. These conditions are the same as with a private trustee. i«l3v reason of the advantages ti th e common fund/ the great majority of people placing their affairs in Me Publß Trust Office prefer that system of investment, but they can ask for investment of their moneys outside it if thev so desire. The whole position is explained to them in the be<nn.nmg and the relative merits of^ both systems pointed out to them.