The funds of workers, such as the solidarity Funds of the FTQ and Fondaction CSN are preparing for massive withdrawals of their shareholders, frightened by the fall of the markets, which raises an issue of fairness, according to an expert.
“There is […] a marked increase in the redemption requests submitted by shareholders of the Fund, that such requests are made by shareholders aged 65 years and older, in retirement or who suffer a drop in income,” says Patrick McQuilken, a spokesperson for the Fund FTQ.
According to a source who confided in the Newspaper, the Fund QFL table this year on withdrawals which could total between $ 750 million and $ 950 million. In normal times, the purchases are rather between 600 and 700 million dollars per year.
“It is sure that if the employment situation continued to deteriorate, we are expecting a lot of redemptions “, we said Julie Cailliau, of Fondaction CSN.
“Currently, there is a higher volume of redemptions than in the past “, wrote Richard Lacasse, spokesman for Capital régional et coopératif Desjardins, a fund other tax-based.
The advantage for applicants who withdraw their investment from these funds at this time is, they buy back their shares at a set price before the market fall. “There are crafty ones who will take advantage of it,” predicts Michel Nadeau, an expert in governance.
The index of the S&P/TSX index of the Toronto stock Exchange has fallen by 21.7 % since the beginning of the year 2020. The S&P 500 of the New York stock Exchange has fallen by 18 %. In comparison, the share value of the Fund FTQ, set in December of 2019 at 46,20 $, up 11 % year on year.
According to another source, you sometimes had to wait several hours on the phone last week, before being able to talk to a representative of the fund so requests for removal were important.
Enough cash ?
Despite the fact that they invest in many SMES, the funds ensure that they have sufficient liquidity to redeem the shares of all the world.
“The Fund maintains internal controls that allow it to manage liquidity in accordance with prudent business practice “, we wrote Patrick McQuilken.
According to Michel Nadeau, the shareholders who sell at this time are at an advantage. He believes, however, just as retirees should pay for their shares at a good price, because they will not have the opportunity to start a long-term financial health. Neither the Fund FTQ or Fondaction CSN were excluded to re-evaluate before the scheduled date of the value of their shares if the situation were to get worse.
Who can withdraw his money
- The shareholders of the retirement
- The shareholders who are 65 years and older
- Shareholders who have lost their jobs or whose incomes have dropped
- Shareholders who want to buy your first house, and ” RAPer “
- Shareholders who wish to return to full-time studies