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I think what Thorburn is saying it's to avoid the need to sell...

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dolcevita

31,459 Posts.

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20/04/20

21:00

Post #: 44151964
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Originally posted by MirCat: ↑

I don't believe that's correct. Anyone withdrawing $10k from their Super will be selling down that amount from their own balance (at the worst possible time of course.That would be true if they only were invested in cash!

In this hypothetical case they hold $10 grand in shares in the fund.
As their holding is in shares, the fund needs to convert these shares into cash to fulfil their request.

I might be wrong, but in this depressed market that could reduce the unit price of people whose super is invested in equities. They get their money and we suffer!

If their a rush for emergency funds it could spiral bigger losses for existing fund holders.

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I think what Thorburn is saying it's to avoid the need to sell the shares. It's a loan to avoid pushing the market lower.
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