Instreet unlocks growth potential in Aussie shares
24 February 2009-- Lonsec ‘recommends’ innovative structured product --
Ratings house Lonsec has a “recommended” rating on the Deferred Purchase Agreement (DPA) recently launched by Sydney boutique manager Instreet that takes advantage of growth potential in Australian equities.
Instreet’s Link Series I and II allows investors to gain exposure to the price performance of the Australian equity market for a cost that is a fraction (about 10-15%) of the notional exposure of the investment.
It is an effective means to gain equities market exposure allowing investors and financial advisors to design strategies to protect capital or reweight their portfolios.
The DPA, which Lonsec has rated “recommended”, has been issued by Merrill Lynch (Australia) Futures Limited.
Lonsec believes the S&P/ASX 200 Index, that the product tracks, is appropriate for investors seeking passive exposure to Australian equities, offering “broad representation, investability and transparency”.
The series does not incorporate capital protection so investors should fully understand the risks associated with equity investments. Any gains are subject to a pre-defined cap level.
The issue price for the Series I fund is $1.19 per unit; Series II $1.45 per unit. The minimum subscription is 5000 units which provides investors with a notional exposure of $50,000 to the Australian equities market.
Instreet managing director George Lucas says: “We developed this structured product in partnership with a group of advisors, and we’re seeing already strong demand.
“Advisors will be able to leave most of the funds in current cash deposits guaranteed by the Federal Government, and will only have to commit a relatively small percentage of their clients’ cash to secure market exposure.
“If the market does rally over the next two years, these clients will participate in the upswing while currently enjoying the security of the government-guaranteed bank deposits.”
He added that this product was particularly suitable for self-managed superannuation funds.
