Using Instreet Masti to assist in reallocation of portfolio risks
Many investors hold a mixture of assets including cash, bonds and equities to achieve diversification within a portfolio however, as shown below this diversification can actually produce a concentration of risk, with over 95% of the portfolio risk due to equity exposures.
In a typical balanced portfolio containing assets including local and international equities, cash, Australian and international fixed income, property and commodities, the allocation of capital to equities is circa 50%.
While the capital appears diversified on a risk adjusted basis the 50% equity allocation is responsible for 96% of total portfolio risk.
Instreet Masti may be used as a means to hold both local and international equity exposures with a much lower allocation of capital to equities, and therefore risk, than in the above diversified portfolio example. The benefit of this approach is a reduction in risk exposure associated with local / international equities as the portfolio cash position is now substantially higher. For example, a $100,000 notional exposure to international equity markets may cost only $6,550, leaving $93,450 to be held in risk-free cash.
Important Information
Purpose of Document: The purpose of this Document is to provide indicative commercial terms only. The Documents commercial results are based on assumptions that may not be realistic. They are indicative only. Markets and market assumptions can change from the time and the commencement date of the Instreet Masti DPA product. Due care and attention have been used in the preparation of this document. However, actual results may vary and any variation may be materially positive or negative.
Document: This Document has been prepared by Instreet Investment Australia Limited ABN 24 622 827 589 (Instreet), a corporate authorised representative of AFSL 434776, and is current as at 12 August 2021.
Issuer and PDS: The Instreet Masti product is issued by Instreet Structured Investment Pty Ltd ACN 140 407 558 and the issue is arranged by Instreet. Instreet Masti is offered in a product disclosure (PDS) or Information Memorandum (IM). The relevant PDS or IM is available from Level 11, 2 Bulletin Place, Sydney, at the website www.instreet.com.au or by phoning 1300 954 678. In deciding whether to acquire or continue to hold and investment investors must first obtain the PDS and IM and carefully consider its contents.
General advice warning: The information contained in this Document is general in nature only. It has been prepared without taking account any potential investors’ personal financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. Advisers must form their own views on whether the Instreet Masti is appropriate after considering their clients’ objectives, financial situation and personal needs. We recommend you seek your own legal and taxation advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Website to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.
However, actual results will vary and any variation may be materially positive or negative.
No responsibility or liability is accepted by Instreet or any third party who has contributed to this document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Past performance: Past performance is not a reliable indicator of future performance.