Absa Group Closes Large Money Market Mutual Fund
Posted on 04/18/2021
Absa Group Limited was originally known as Amalgamated Banks of South Africa. Absa Group is a South African-based financial services group, offering personal and business banking, credit cards, corporate and investment banking, wealth and investment management, as well as bancassurance.
Absa Group closed South Africa’s biggest money market mutual fund, the 86 billion rand fund. Absa Group gave investors until July 1, 2021 to withdraw funds and have the option to go into other financial products such as the Absa Prudential Money Market Fund or deposits. The 25-year old Absa Money Market Fund is the third biggest unit trust in South Africa. In a notice to clients, Absa Group said the reason for the fund closure is that many of the fund investors don’t understand that the fund is not guaranteed by the bank. Fund investments are made via the fund management business and cannot be counted on the bank’s balance sheet in the same way as bank deposits. Absa Group could be wanting these fund investors more as depositors to increase the bank’s lending capacity.
Absa Asset Management, the fund management unit of Absa Group, looks to be be for sale.