Investor News

High Growth Shares Fund - ASIC extension to short selling ban

Tue, 21 Oct 2008

ASIC has announced an extension of the ban on short selling originally announced on 21st September.

The ban on covered short sales for non-financial stocks will remain in force until 18th November, 2008. ASIC expects to lift the ban the next day. ASIC and the ASX are currently developing disclosure and reporting arrangements that will apply to future covered short selling arrangements.

The ban on covered short sales for financial stocks (including property trusts) will remain in place until 27th January, 2009.

As previously advised we do not see the actions taken by ASIC as having a detrimental effect on the fund’s medium or longer term performance as we rarely short stocks on a short term trading view. The High Growth Shares Fund is predominantly a long fund which can employ a number of techniques, including short selling, active trading and enhanced longs, to enhance returns. Prior to the original ban the level of shorting within the fund had reduced in line with available opportunities. We will continue to seek to add value to the portfolio via active trading and enhanced long positions using short Equity SPI contracts.

We remain confident that we can continue to add to returns on the long side, notwithstanding this extension to the temporary short selling ban.

Aviva Investors will continue to work with government, regulators and industry bodies to ensure a workable solution incorporating covered short selling is reached.