Macquarie MINIs

Features and benefits

Macquarie MINIs allow traders and investors to leverage trades in a transparent way.

MINIs can provide you with an exposure to listed shares, ETFs and indices for a fraction of the underlying asset cost.

Key features

• You generally get a one for one return from the underlying investment so the value of your MINI moves cent for cent with the underlying investment^{^}
• You can invest in both long and short positions, meaning you can use MINIs for a range of trading strategies
• Macquarie MINIs have an embedded stop loss feature (so you can never lose more than your initial investment) and there are no margin calls
• The cashflows and valuations are transparent so you always know how much your MINIs are worth, and with daily pricing you can easily track your returns.

Types of MINIs

Type of MINI	Underlying asset	Timeframe	Risk profile	Uses
Share MINIs	ASX-listed shares	Short or long term	High	Leveraged exposure and hedging
ETF MINIs	ASX-listed exchange traded funds	Short or long term	High	Leveraged exposure and hedging
Index MINIs	Linked to the performance of commodity prices, the Australian sharemarket, or international sharemarkets*	Short or long term	High	Leveraged exposure and hedging

* Index MINIs track the change in the price of the relevant Index Future

Macquarie offers a range of MINIs. Macquarie MINIs may be identified as follows:

^ Receive a one for one return plus or minus any adjustment to the strike price for dividends and interest , and taking into account any spread on the MINI Price that may impact the return. If an investor chooses to exercise a Macquarie MINI or a Macquarie MINI is terminated early in accordance with the Terms and Conditions any return may be reduced by an amount for Expenses.

How do they work?

Macquarie MINIs work in the following way:

Macquarie MINIs are simple to use:

• You pay – the upfront cost of the Macquarie MINI
• You receive – a leveraged investment into your choice of a range of ASX listed shares, ETFs or indices
• Maturity – there is no maturity date, meaning you can hold the investment for as little or long as you like*
• Cashflows – there are no cashflows to worry about while you hold the investment
• When you sell – you’ll generally receive a one for one return on the underlying investment^

Valuation is simple

The value of a Macquarie MINI is transparent and easy to understand.

• Value of MINI Long = (Underlying Asset Price – Strike Price)/Conversion Factor^
• Value of MINI Short = (Strike Price – Underlying Asset Price)/Conversion Factor^

For example, if the current CBA share price is $50 and the Macquarie MINI strike is $40 the value of the Macquarie MINI is: ($50 - $40)/1 = $10

Funding costs

The strike reflects the amount of leverage and is adjusted for your interest cost and any dividends paid on the underlying asset.

A funding cost is only incurred if a MINI is held overnight. If you hold a MINI position overnight the strike price will be adjusted by the cost of funding that position. Funding costs vary depending on whether you hold a MINI Long or a MINI Short.

The funding cost is available in the Indicative Daily Pricing Sheet.

Stop loss feature

Macquarie MINIs contain an inbuilt stop loss feature so you can never lose more than your initial investment amount. After the issue date the stop loss level may vary, having regard to movements in the underlying asset price, strike price and dividends. The current stop loss level is available in the Indicative Daily Pricing Sheet. Please note there is no guarantee that Macquarie will be able to achieve the stop loss level in determining the amounts you receive on the occurrence of a stop loss event.

* Please refer to the MINIs PDS for information regarding Early Termination of MINIs.
^ Receive a one for one return plus or minus any adjustment to the strike price for dividends and interest, and taking into account any spread on the MINI Price that may impact the return. If an investor chooses to exercise a Macquarie MINI or a Macquarie MINI is terminated early in accordance with the Terms and Conditions any return may be reduced by an amount for Expenses.

Relevant documents

Indicative daily pricing

• Macquarie MINIs - Daily (pdf)
• Macquarie MINIs - Daily (xls)

Useful links

• Macquarie MINIs Product Disclosure Statement
• Macquarie MINIs Exercise Notice
• ASX Understanding and Trading Warrants Handbook
• Introduction to MINIs brochure
• Share MINIs trading guide
• Index MINIs trading guide

 

Key risks

The risks of investing in Macquarie MINIs is outlined in the PDS, below is a summary of some of the risks:

• Performance risk: the underlying investment may not perform well and consideration should be given to the performance required to break-even and the impact of the funding cost adjustment on any break even
• Leverage risk: losses and gains will be magnified
• Counterparty risk: obligations are unsecured contractual obligations
• Stop loss risk: There is no certainty that Macquarie will be able to achieve the stop loss price when determining the stop loss amount
• Liquidity risk: at certain times there may be limited or no liquidity
• Early Termination: Macquarie may terminate a Macquarie MINI on the occurrence of an Issuer Call Event or Extraordinary Event.

You should ensure you have read the PDS before making any decision to invest in Macquarie MINIs and/or seek professional advice.