Macquarie Fusion® Funds

Macquarie Fusion® Funds 

An impressive investment solution

The Macquarie Fusion® Funds (Fusion Funds) provides investors with the opportunity to gain exposure to a broad selection of managed funds, with the ability to borrow 100% of the investment amount and protect 100% of the initial investment amount at Maturity.

The Macquarie Fusion® Funds November 2008 Offer has now closed.

Why invest in Fusion® Funds?

With Macquarie Fusion Funds investors can obtain exposure to the market, and potentially borrow 100% of their investment amount.

This investment provides potential benefits including:

  • Exposure to a choice of 16 managed funds that are generally not available for direct investment by Australian retail investors;
  • The opportunity to borrow 100% of the investment amount so there is no need to tie up your existing assets;
  • Protection of 100% of an investor's initial investment amount at Maturity if an investor obtains an Investment Loan or, if an investor uses its own funds, through the purchase of a Put Option. Importantly, there are no margin calls;
  • A track record of performance for specific Fusion Funds*; and
  • An Australian Taxation Office Product Ruling (PR 2008/64)** addressing the tax consequences for eligible investors of borrowing from Macquarie to invest.

Macquarie Fusion Funds may be suitable for:

  • First time investors - those investors that have limited upfront capital, are looking to take a loan to build a managed fund portfolio, have a long term focus and have the ability to pay the ongoing interest on the loan.
  • Wealth accumulators - those investors who have an existing investment portfolio, but have limited readily available capital to help accumulate more wealth or diversify their portfolio. They could be looking to diversify their investment portfolio while not tying up their existing equity by taking advantage of 100% finance which is available.
  • Wealth protectors - those investors approaching retirement who want to access assets with growth potential and capital protection at Maturity.

How does an investment in Fusion Funds work?

Investors choose the Fusion Fund(s) that best suits their investment objectives. An investment in a Fusion Fund will initially be split between units in an Equity Trust (99.99%), which invests in the particular Underlying Managed Fund you have chosen, and a Cash Trust, which invests the remaining 0.01% in fixed term deposits or like investments. Your investment will be managed using a specialist technique known as Threshold Management®.

Threshold Management seeks to ensure that the value of an investor's units in a Fusion Fund at the expiry of the Threshold Management Period is at least equal to an investor's initial Investment Amount.

A major risk associated with Threshold Management is that an investment in a Fusion Fund could be substantially switched from units in the Equity Trust, and hence substantially switched from exposure to the Underlying Managed Fund, into corresponding units in the Cash Trust. See section 4 of the Product Disclosure Statement (PDS) for further information.

Protection of 100% of the initial investment amount

If an investor chooses to borrow to invest:

Each Investment Loan is limited recourse at Maturity to an investor's units in the relevant Fusion Fund. This means that, if for any reason the value of an investor's units in the relevant Fusion Fund is less than the principal amount owing on an investor's Investment Loan at Maturity, an investor will not have to pay the difference from their own funds. An investor will need to use their own funds to cover any shortfall if an investor redeems under a Loan at a time when the value of their Units is not sufficient to repay their Investment Loan.

For those who have an Investment Loan, if a Profit Trigger is reached, Macquarie will offer an investor the opportunity to increase the protection to 150% of their Investment Amount, either by obtaining a limited recourse Profit Loan (if it is offered) or by acquiring a Put Option for a Protection Fee.

The fee payable for the Put Option is called the Protection Fee. Refer to section 3.13 of the Product Disclosure Statement (PDS) for further details.

Investors who do not borrow to invest:

If an investor invests in the Fusion Funds with their own funds, they may also acquire a Put Option to protect 100% of their initial investment amount at Maturity from any potential market down turn. In this case the Protection Fee is also payable.

 

*Past performance is not a reliable indicator of future performance. Investors should be aware that none of Macquarie, MFPML or any ether Macquarie Group company express any view as to the future performance of the Fusion Funds.

**The Product Ruling PR 2008/64 is only a ruling on the application of taxation law and is in no way expressly or impliedly a guarantee or endorsement of the commercial viability of the Macquarie Fusion Funds, of the soundness or otherwise of the Macquarie Fusion Funds as an investment, or of the reasonableness or commerciality of any fees charged in connection with the Macquarie Fusion Funds. The Product Ruling is only binding on the Commissioner of Taxation if the investments in the Macquarie Fusion Funds are implemented in the specific manner provided in the Product Ruling. A copy of the Product Ruling can be obtained free of charge as set out above.

This information has been prepared by Macquarie Financial Products Management Limited ("MFPML") ABN 38 095 135 694, AFS Licence 237 847 as the issuer of units in the Macquarie Fusion Funds. An invitation to apply for units in the November 2008 offer of Macquarie Fusion Funds is made by MFPML in the Product Disclosure Statment dated 12 September 2008 ("PDS"). In deciding whether to acquire or continue to hold an investment in the Macquarie Fusion Funds, an investor should obtain a copy of the PDS and consider its contents. The PDS is available from MFPML at No. 1 Martin Place, Sydney, on this website or by phoning 1800 550 177.

This information has been prepared by MFPML without considering an investor's objectives, financial situation or needs. An investor should consider the appropriateness of this information in relation to their objectives, financial situation or needs.

The Investment Loans and the Put Options are offered by Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie"). The Loans are subject to terms and conditions and to approval by Macquarie. Although 100% of the initial investment amount is protected at Maturity, the amount initially invested is unlikely to have the same real value at the end of the investment term as it would have when you initially invest, due to the likely effect of inflation and the time value of money.

Macquarie, MFPML or their associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles including as investment banker, broker, lender or adviser. Macquarie, MFPML or their associates may receive fees, brokerage or commissions for acting in these capacities. In addition, Macquarie, MFPML or their associates, officers or employees may buy or sell the financial products as principal or agent. You may contact Macquarie or MFPML on 1800 550 077.

Fusion® is a registered trademark owned by Macquarie and used by MFPML and the Fusion Funds under licence from Macquarie. Threshold Management® is a registered trade mark owned by MFPML.

Investments in the Fusion Funds are not deposits with, or other liabilities of, Macquarie, MFPML or any other Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income or capital invested. None of Macquarie, MFPML or any other Macquarie Group company guarantees any particular rate of return on, or the performance of, the Fusion Funds, nor do any of them guarantee the repayment of capital from the Fusion Funds.