Macquarie Portfolio Management Ltd launches two new capital protected investments offering exposure to Asia and Australia

19 April 2006

Following the successful launch of the first two series of Macquarie Atlas last year, Macquarie Portfolio Management Ltd is pleased to announce the launch of Atlas 3 and Atlas Asia - investments engineered to provide capital growth, capital protection, income, diversification and tax efficiency with a choice of Australian or Asia share market exposure.

The latest Atlas series offerings provide investors with two choices of share market exposure. Atlas 3 offers diversified exposure to the Australian market, whilst Atlas Asia offers exposure to a suite of six Asian equity indices - the Japanese Nikkei 225, the Korean KOSPI 200, the Hong Kong Hang Seng, the Hang Seng China Enterprise Index, the MSCI Singapore, and the MSCI Taiwan. With both offerings, investors will receive 130% of any increase in the average level of the underlying indices (averaged quarterly) in 7.5 years. Both investments are capital protected on 31 December 2013.

When asked about the two offerings, Pia Cooke, a manager within Macquarie's Equity Markets Group, said: "Investors have increasingly been asking us to provide them with an easy way of accessing growth within Asia. Yet at the same time, investors are still demanding exposure to the domestic share market because of its defensive characteristics. This feedback has prompted us to offer both an Australian and an Asian investment alternative, allowing investors to invest in one or the other, or a combination of both, depending on their investment profile."

When asked about Atlas 3, Ms Cooke commented: "The Australian share market has provided strong consistent investment returns over the long term. The Australian share market is considered to be a broadly defensive market, and with Macquarie Research Equities (MRE) analysts' view that the long term outlook for Australian equities remains positive, Atlas 3 offers an easy way for investors to gain exposure to the Australian share market with capital protection."

Ms Cooke also adds, "By comparison, the Asian region is highly diverse economically, and provides a multitude of potential opportunities for investors to profit from this region. This profit potential has been evidenced in recent years by the significant growth and recovery in many of the larger Asian stock markets. And MRE believe that recent economic data suggests that the fundamentals support continued growth in these markets, which is why we are experiencing increased investor confidence in the Asian region."

"For those investors who are excited about the potential for growth in Asia and want to access these markets, Atlas Asia offers a simple way to gain diversified exposure with capital protection."

In addition to the potential for capital growth, Atlas 3 and Atlas Asia provide the opportunity for investors to receive income from their investment. Both investments offer a fixed rate of income in the first year - Atlas 3 offers a fixed income of 6% in Year 1, and Atlas Asia offers a fixed income of 4% in Year 1. From year 2, the income becomes variable with the headline yield for both investments rising by up to 1% every year.

From Year 2 onwards, the income received is related to the performance of a 'reference basket' of 80 stocks.> The reference basket for Atlas 3 consists of 80 of Australia's largest stocks and Atlas Asia consists of 80 stocks from the six Asian stock markets that comprise the growth component of the investment. These stocks have a minimum market capitalisation of $1 billion. For both investments, the yield will fall by one-seventh if, after the first year, one of the stocks in the 'reference basket' of 80 shares falls by more than 45% from its initial price. It must close below this level for 3 consecutive trading days (this is called a 'Knockout Event'). There are other circumstances which may result in a Knockout Event - please refer to the PDS for details.

Ms Cooke says "In both investment offerings, the 80 stocks in the reference basket are diversified across a variety of sectors, thereby reducing sector concentration."

Macquarie Bank is offering to lend 100% of the initial investment amount to approved investors, at competitive interest rates. With interest rates expected to start at 7.75%pa, Macquarie Bank is offering fixed and variable interest options, and quarterly as well as annual payment in advance options. The minimum loan amount is $50,000.

Macquarie Bank is also offering an Interest Assistance Loan that will fund 50% of investors first interest payment, covering the 12 month period from 30 June 2006 to 30 June 2007. The Interest Assistance Loan is repayable in 3 equal instalments of interest and principal on 30 June 2007, 2008 and 2009.

Cooke adds "In the lead up to June 30, we believe there will be a good level of demand for both of these investments, particularly from those investors looking to borrow to invest. With limited initial cash outlay, investors can benefit from potential capital growth and income and, if eligible, tax deductions for pre-paid interest on their loan. Obviously, we recommend investors carefully consider the risks of borrowing and consult professional tax and financial advisers before gearing into our products."

Atlas 3 and Atlas Asia are exciting investment opportunities and may be suitable for a range of investors who want to increase the diversification within their portfolios, especially for those investors wanting to access markets that are typically difficult to access. These investments may also be suitable for Self Managed Super Funds, ungeared, as both investments provide investors with a diversified investment with capital protection in 7.5 years.

Both offers are open until 23rd June 2006.

For further information, please contact:

Pia Cooke
Manager
Equity Markets Group
Tel: (612) 8232 6974

Capital protection applies only on 31 December 2013 and is subject to the terms and limitations of the Equity Markets Investments Agreement and in particular will not apply in the case of an Extraordinary Event including inability to hedge Asian investments (Atlas Asia only) - see the PDS for more details.

Investments in Macquarie Atlas Series Trust ("Trust") are not deposits with, or other liabilities of, Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie") or any Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. None of Macquarie, Macquarie Portfolio Management Limited ACN 092 552 611 ("RE") or any Macquarie Group company guarantees the performance of the Trust, the repayment of capital from the Trust or any particular rate of return.

This information has been prepared by RE, the responsible entity of the Trust. Series 3 (July 2006) and Series 4 (July 2006) Units (collectively, “Units”) issued by RE are offered under separate Product Disclosure Statements (each "PDS") which will be available from macquarie.com.au/atlas from mid April. Investors should obtain the PDS from RE relating to the relevant units and consider it before making any decisions about whether to acquire, or continue to hold, those units. Macquarie or its associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles, may buy or sell the financial products as principal or may effect transactions that are not consistent with this information and may receive fees, brokerage or commissions for acting these capacities. Neither RE nor Macquarie Bank Limited gives, or purports to give, any taxation advice. The taxation discussion in this document is based on laws current at the time of writing. Those laws and the level of taxation may change. The application of taxation laws to each investor depends on that investor's individual circumstances. Accordingly, you should seek independent professional advice on taxation implications before making any investment decisions.

Information current as at 18 April 2006.