SSB updates IndexShares product
Salomon Smith Barney (SSB) has expanded its neutrally branded IndexShares product range with the introduction of IndexShares 100 High Yield Instalments.
The new investment product, which will be listed on the Australian Stock Exchange early next week, is the second to come under the IndexShares brand. It follows SSB's exchange traded fund IndexShares 100, which exposes investors to 100 top Australian companies.
The instalments product takes the IndexShares 100 product one step further by offering a lower entry cost choice and creating a high yield environment. The IndexShares 100 High Yield Instalments are currently running at a high yield of 12 per cent pre annum, with potential tax deductions.
Investors can purchase an IndexShares 100 High Yield Instalment for the cost of a down payment, and are still entitled to three times the exposure for every dollar invested. They also benefit from dividends, franking credits and capital appreciation, and market moves over a shorter time frame (relative to the IndexShares 100 product).
Salomon Smith Barney vice president equity structured products Michael McCarthy says the diversified nature and lower risk profile of the portfolio means the high yield Instalments are generally priced more attractively than single shares.
Salomon Smith Barney director, corporate and retail equity derivatives Steuart Roe says SSB is looking at introducing further Index Shares products, and the next is likely to provide exposure to international equity markets.
Roe says as well as looking at launching a mirror international product, the group, within the next month will also be working with Assirt.
According to Roe, Assirt will rate the fund, enabling SSB to test the waters with the financial planning fraternity.
"We are keeping financial planners in mind [with this fund]. We are not trying to exclude them, we can't ignore them," Roe says.
In the past few months SSB has spoken with financial planners at promotional seminars. The group plans to offer seminars to stockbrokers in the next month.
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