Instreet launches structured approach
A new structured product giving investors a lower threshold to break-even over a three-year period has been announced by Instreet.
Commenting on the new SMSF-friendly product, George Lucas managing director of the boutique investment manager said recent feedback from financial planners had suggested that investors wanted to have a lower break-even point as the markets remain subdued.
"With this in mind, Instreet has designed Instreet Series Link 48A - another in its Link Series - which provides a three-year exposure to Barclays ComBATS VOLT 5.0 per cent Excess Return Index (ComBATS Index)," he said.
"What makes this product different is the low break-even of 2 per cent over the three-year term.
"The issue price of $1.60 per unit, which is a fraction of the notional $10 exposure to the ComBATS Index, also sets it apart."
Lucas said if the ComBATS Index remained flat over the three-year term, investors would receive $1.40 back, and a 5 per cent gain in the reference index over three years would translate into $1.90 at maturity.
"This compares to other structured products that provide leverage to growth assets where the break-even thresholds are higher and more in line with the interest payments that are lost if the reference index remains flat," he said.
"This product is designed for advisers and their clients who are in a sober mood brought about by the current market conditions.
"They want positive returns from their investments even when markets only post modest returns."
Having been awarded a 'recommended' rating by the Lonsec research house, Lucas said Instreet Series Link 48A offered uncapped upside potential to an alternative asset class that would assist in portfolio diversification.
"It's an SMSF-friendly product with a known risk, as the maximum loss is the initial investment upfront," he said.
"In the worst case scenario, if the reference index - less all fees - goes down more than 8 per cent from its initial level, investors could lose their initial investment.
"The units are therefore most suited to investors wanting high growth."
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