MQ launches new product platform to access global investment ideas including water utilities

26 February 2007

MQ Specialist Investment Management today announced the launch of MQ Gateway Trust (MQ Gateway), a new platform that will allow retail investors to access a menu of global investment ideas, including water utilities, Asian equities and global equities.

Cathy Kovacs, Division Director in the Equity Markets Group said MQ Gateway was a simple way to access the best of global investment ideas at a time when Australian investors were increasing their allocations to international markets and looking for a tool other than active fund managers to gain exposure.

MQ Gateway is a platform offering a menu of investment ideas. Investors choose the investment idea they want to access, and invest as little as $10 000. Investors then gain exposure to the quarterly averaged growth in the underlying investment, with capital protection* in 3 years.

The initial menu has been driven by fundamental research prepared by Macquarie Research Equities and includes:

• Global Water Utilities – exposure to the growing water utilities market
• Asian equities
• ‘Best-of’ Australian equities v’s Japanese equities
• ‘Best-of’ global equity markets

"Water is a very hot topic, but up until now has been very difficult access as an investment idea. Investors now have the opportunity to gain exposure to the potential upside to the growing water utilities market, a market that has a low correlation to other investments. In this instance exposure is gained via the Macquarie Global Water Index," added Kovacs.

The ‘best of’ Australian and Japan is another option for investors.

"Investors who’d like to gain exposure to the potential growth in the Japanese equity market, but don’t want to miss out on the Australian equity market if it happens to perform better over a three year period, can effectively hedge their bets by investing in the ‘best of’ idea. At the end of the investment term, investors are entitled to 100% of the best performer and 0% of the worst performer."

This series, and subsequent series, of MQ Gateway may have significant appeal for Self Managed Super Fund investors, as a way to diversify exposure from cash and Australian shares to global investment ideas, without the requirement to pick fund managers and with a degree of capital protection.

Capital protection provides the ‘sleep at night’ factor for investors entering new, and sometimes volatile, markets, if they are prepared to invest for the full three years. The existence of 100% capital protection also means that non-Self Managed Super Fund investors can apply to borrow 100% of the capital required to make the investment, thus gaining leveraged exposure to the investment ideas. Indicative borrowing rates will start at 8.50%pa.

"Financial adviser feedback has been very strong. Advisers have provided input into the design of the platform and some dealer groups are choosing to customise an investment idea specifically to match the portfolio needs of their clients. We have provided two such groups with exclusive first round access to emerging markets and commodity themes. We intend to offer these themes to the broader market in the next series of MQ Gateway.

The initial offer of MQ Gateway closes on 5^th April 2007. Subsequent offer are planned to close in June 2007 and September 2007.

About MQ

MQ is a specialist business of Macquarie Bank. The MQ business includes MQ Specialist Investment Management, the specialist and absolute return investment manager, MQ Capital, the fund of fund manager, and MQ Structured Products, the provider of MQ Gateway and other closed end fund products.

As at 31 December 2006, MQ is managing $1.157 billion.

About the Macquarie Global Water Index

The Macquarie Global Water Index is an indicator of the performance of a global basket of "water" related stocks and is calculated and reported by FTSE. The index is market capitalisation weighted and currently contains 13 public companies from around the world with a combined market capitalisation of over US 60bn. The companies in this index are those that own water facilities, those that will supply infrastructure to the growth in new facilities and desalination plants, and those involved in water treatment. MQ Gateway Water provides investors with a quarterly averaged exposure to the Macquarie Global Water Index. Historical back testing of MQ Gateway Water over daily rolling 3 year periods (assuming a protection level of 100% and a participation rate of 100%) shows that the average annual return has been 16.3%.

For more information, please contact:

Cathy Kovacs
Division Director
Equity Markets Group
Tel: (612) 8232 8683