We understand and expect that with media coverage of the Silicon Valley Bank collapsing some clients may feel some nerves about their investments.

We have confirmation from Centrepoint (CPAL Model portfolios) and Colonial First State that there is no exposure in their investments to this collapse.

This covers the majority of our clients investments.

DIVERSIFICATION LESSON – Why your investments are diversified!

  • The interesting thing about this collapse is that the SV bank lacked diversification and a chain of events led to its demise,
  • This was a bank holding deposits and not really lending money
  • The clients were mostly start ups
  • They were mostly in the tech area
  • The tech sector is currently down at the moment
  • The clients wanted to withdraw their money as they needed cash flow
  • The bank invested in bonds and had to sell these to repay the clients, they lost $1.5 billion in this sale
  • The share price fell 60% with this news
  • Then it fell about another 60%….. then collapsed
  • It’s reported other banks in the US are more diversified than SVB

We hope this provides some clarify and peace of mind. If you would like to discuss further please give us a call

VJC Wealth

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.