Macquarie launches global gearing solution for SMSFs
Macquarie has launched an instalment warrant product that allows self-managed superannuation funds (SMSFs) to borrow 60 per cent of funds to invest in selected global markets.
The Macquarie reFlexion Select provides investors with a limited recourse loan to fund 60 per cent of the issue price of the investment after they have contributed 40 per cent of the initial capital plus an application fee.
Investors will be able to invest ($50,000 minimum initial investment) in any or all of the four underlying investments, Japan Select, BRIC Select, Commodities Select and Europe Select.
The limited recourse loan has a fixed interest rate for the five years and five month loan term (applications close on April 30), and the interest rate will depend on the underlying investment.
Interest payable on the loan capitalises monthly throughout the term, with investors not required to make any interest on principal payments until maturity in 2013 or at redemption.
Macquarie Capital division director Jason King said the provision of a limited recourse loan would mean investors would “never be required to contribute more of their own funds to pay back the loan until maturity (or early redemption), even if their investment in the product is worth less than the loan”.
The product was suitable for SMSF investors looking for “global investment opportunities with growth potential, while taking the cash flow advantages of an investment loan with interest capitalising to maturity”, he said.
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