Money-back guarantee at Macquarie’s Asian smorgasbord
Macquarie Bank will follow AMP into offering a capital-guaranteed exposure to Chinese equities, through the Macquarie Reflexion Trusts to open in June.
The Reflexion range will also offer Japanese and Asian options, with Merrill Lynch supplying the index exposure and providing the capital protection for all three funds.
The indices to be replicated by Merrill Lynch are its China Dragon Index, Asia PER Accumulation Index and Nikkei 225 Index.
A loan for 100 per cent of the investment can be provided by Macquarie, taking advantage of low overseas interest rates to charge just 4.91 per cent for a loan in Japanese yen or 6.19 per cent in US dollars (a similar margin loan in Australian dollars cost about 8 per cent).
“There is no currency risk in the loans, because they are matched to the currency of the underlying assets,” said Macquarie Financial Products Management director, Peter Lucas.
The minimum investments are $US5000 for the China and Asia Reflexion trusts, and 500,000 yen for the Japanese trust. The offer opens June 3 and closes the end of that month, and runs for seven years.
AMP earlier this month launched its second capital-protected China Fund. Ironically, the margin lending division of Macquarie offers investors a 100 per cent loan to that competing product.
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Michael Bailey
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