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Home» Advisers» Products & platforms» Investments» Alternative investments» Tailored Portfolio Collar

Products & platforms

Tailored Portfolio Collar

A flexible and tailored platform to gain exposure to domestic equities and select managed funds

> Download an adviser toolkit or Call 1800 080 033

Features
How do they work?
More information
How to invest

Features

Tailored Portfolio Collars (TPCs) are a flexible and tailored platform to gear into a portfolio of ASX listed shares and select managed funds with portfolio protection⁺ at expiry. Your clients can elect to borrow up to 100 per cent of the purchase price of the portfolio, with 95 per cent protection⁺ at expiry^ and no risk of margin calls.

Using TPCs, investors will also receive any ordinary cash dividends and distributions and franking credits* throughout the life of their investment.

Key benefits

Access a wide range of ASX listed shares and select managed funds with the comfort of portfolio protection⁺ at expiry
Ability to tailor own portfolio, or access model portfolios⁺⁺
Potentially borrow up to 100 per cent^ of the purchase price of the portfolio with no risk of margin calls
Receive any ordinary cash dividends and distributions and franking credits*
Flexible investment timeframes and the freedom to tailor the portfolio protection level⁺ and individual cap levels
Protection⁺ is provided on a portfolio basis at expiry, which may reduce the cost of protection⁺
The potential to reduce the upfront cost of protection⁺ by creating a "collar" structure where participation in any upside growth in each share and managed fund in the portfolio is capped
Interest Assistance Loans ("IALs")^ are a cashflow management tool potentially available in conjunction with a Tailored Portfolio Collar.

Risks

Some of the risks of investing through a Tailored Portfolio Collar Facility include:

the value of the shares and/or managed funds in the portfolio for an option may fall substantially, even over a short period of time. The more volatile the price or value of those shares and/or managed funds, the riskier your client's investment will be
if your client sets a cap price for each share and/or managed fund in the portfolio, your client may need to pay to us any gains in each of those shares and managed funds above its cap price on the expiry of the option
your client will have to pay all amounts owing in relation to their investment, even if the investment performs poorly
in certain circumstances, which include events nominated by us and events beyond your client's control, your client's options and loans may be terminated or lapsed early. In some circumstances, your client may be required to make further payments to us
the more highly geared your client's investment is, the riskier the investment will be
us exercising a discretion we have under the terms of the TPC in a way which adversely affects your client (although we will exercise any discretions in a reasonable manner) and
if we fail to perform our obligations, your client's may not receive any payment which they are entitled to receive from us.

You and your client's should carefully consider the risks that may affect the value of your client's investment before making any investment decision. You and your client should refer to the PDS for more detailed information about the risks of investing through a Tailored Portfolio Collar Facility.

Terms and conditions

Please click here for the Terms and Conditions for Tailored Portfolio Collars.

How do they work?

This information is only a summary of some of the main features of a TPC. You should refer to the PDS for full details of how a TPC works.

Upfront	During the investment	At expiry
Your client can choose their preferred portfolio protection level⁺ (up to a maximum of 100%) Your client may elect to borrow up to 100%^ of the purchase price of the portfolio Your client contributes the difference between the purchase price and the loan amount (if any) plus any upfront interest and protection⁺ costs Your client has the option to reduce the upfront cost of protection⁺ by creating a "collar" structure where participation in any upside growth is capped on an individual asset level Potential to prepay interest (for up to 12 months) with an Interest Assistance Loan.	Receive any ordinary cash dividends and distributions and franking credits* No risk of margin calls Pay any additional interest and protection⁺ costs, where the term of the option(s) and/or loan are greater than 12 months. In some circumstances: the terms of the option(s) may also be adjusted (eg where corporate actions occur); and the options and any loans may be terminated early in which case further payments may be required from your client to us.	When your client's TPC expires, your client can choose to: extend their investment for a further term^# retain the portfolio by paying any amounts owed to us (eg any loan and any Variable Premium, that is the amount by which the price or value of any share or managed fund at expiry exceeds its cap price) dispose of the portfolio, and receive the disposal proceeds (if any) less any amounts owed to us (eg any loan and any Variable Premium). If there is any shortfall, your client will need to pay the balance to us from their own funds.

Upfront

During the investment

At expiry

Your client can choose their preferred portfolio protection level⁺ (up to a maximum of 100%)
Your client may elect to borrow up to 100%^ of the purchase price of the portfolio
Your client contributes the difference between the purchase price and the loan amount (if any) plus any upfront interest and protection⁺ costs
Your client has the option to reduce the upfront cost of protection⁺ by creating a "collar" structure where participation in any upside growth is capped on an individual asset level
Potential to prepay interest (for up to 12 months) with an Interest Assistance Loan.

Receive any ordinary cash dividends and distributions and franking credits*
No risk of margin calls
Pay any additional interest and protection⁺ costs, where the term of the option(s) and/or loan are greater than 12 months.

In some circumstances:

the terms of the option(s) may also be adjusted (eg where corporate actions occur); and
the options and any loans may be terminated early in which case further payments may be required from your client to us.

When your client's TPC expires, your client can choose to:

extend their investment for a further term^#
retain the portfolio by paying any amounts owed to us (eg any loan and any Variable Premium, that is the amount by which the price or value of any share or managed fund at expiry exceeds its cap price)
dispose of the portfolio, and receive the disposal proceeds (if any) less any amounts owed to us (eg any loan and any Variable Premium). If there is any shortfall, your client will need to pay the balance to us from their own funds.

More information

At a glance

Assets available	Wide range of ASX listed shares and select managed funds available (subject to Macquarie’s approval)
Gearing level	Optional and flexible. Investors can potentially borrow up to 100%^ of the purchase price of the portfolio with 95% protection⁺ or contribute all of their own capital
Protection level⁺	Investors have the flexibility to set preferred portfolio protection levels (up to a maximum of 100%)
Investment term	Flexible investment terms of six months to five years available
Minimum investment amount	Minimum investment amount of $1 million, with a minimum value of $125,000 for each type of share and managed fund
Distributions	Receive any ordinary cash dividends and distributions and franking credits* from the portfolio over the life of the investment
Prepay interest	Potential to prepay interest up to 12 months in advance
IAL	Investors have the potential to access an IAL, to assist with interest payment obligations and minimise their up front cash outlay by funding the prepayment of interest prior to the end of each financial year^

How to invest

Step 1	Obtain a copy of the Product Disclosure Statement (PDS) and Terms and Conditions and provide these to your client. These documents can be downloaded or obtained by contacting Macquarie on 1800 803 010
Step 2	Ensure your client reads the PDS and Terms and Conditions carefully
Step 3	Arrange for your client to complete and return the Application Form within the PDS and any other relevant documentation that may be required (eg AML information) and submit directly to Macquarie: Client Service Team - Tailored Collar Solutions Macquarie Bank Limited GPO Box 4294 SYDNEY NSW 1164 or Fax to: (02) 8232 6158 Note: application forms may be faxed to us on the number above and we may act on your fax. You should however send your client's original application form to us for our records
Step 4	Contact Macquarie to discuss your client’s proposed TPC investment on 1800 080 033. Your client should then complete a transaction request detailing your client’s proposed investment and submit it, together with any other required information (eg, credit information) directly to Macquarie: Client Service Team - Tailored Collar Solutions Macquarie Bank Limited GPO Box 4294 SYDNEY NSW 1164 or Fax to: (02) 8232 6158 Note: Transaction Requests may be faxed to us on the number above and we may act on your fax. You should however send your client's original Transaction Requests to us for our records

Contact us

Call: 1800 080 033

Overseas: +61 2 8245 4903

Fax: +61 2 8232 6158

Speak to your Macquarie Specialist Investments Business Development Manager

Where we provide any advice on this website, it has been prepared without considering your objectives, financial situation or needs. Before acting on any advice on this website, you should consider its appropriateness to your circumstances and, if a current offer document is available, read the offer document before acquiring products named on this website.

Past performance of any product described on this site is not a reliable indication of future performance.

Other than Macquarie Bank Limited (Australian Credit Licence (ACL) 237502) ABN 46 008 583 542 (MBL), any Macquarie Group entity noted on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). That entity's obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.

+ Protection does not apply in the event of an early termination or lapse of your investment, and is subject to MBL meeting its obligations under the terms.

^ Subject to credit approval.

* Subject to eligibility.

# Restructure costs may apply.

++ Model Portfolios are not tailored for particular investors' needs, objectives or circumstances and are not a recommendation by Macquarie of any particular asset allocation. They are subject to change and, while prepared with reasonable care, are not guarantees of any particular investment outcome. Please use model portfolios cautiously.

This information is provided to you by Macquarie Bank Limited ABN 46 008 583 542 and AFSL 237502 ("Macquarie"), the issuer of the Tailored Portfolio Collar Facility ("TPC Facility"). The TPC Facility is offered pursuant to a Product Disclosure Statement dated 23 May 2011, as may be amended or supplemented from time to time (the "PDS") available from Macquarie on the contact points referred to in this information. You and your clients should obtain a copy of the PDS and consider it carefully before making any investment decision. In particular, you and your clients should closely consider the risks of investing through the TPC Facility, as set out in the PDS.

The information provided in this document is general advice only and does not take account of what your clients currently have or what they want and need for their financial future. Macquarie is not a fiduciary or adviser to you or your clients. You and your clients should consider the appropriateness of the information having regard to your client's objectives, financial situation and needs. We recommend your clients obtain financial and legal advice before making any investment decision.

Macquarie does not give tax advice. Any tax discussion in this document is based on laws current at the time of writing. Those laws and the levels of tax may change. The application of tax laws to an investor depends on the investor's individual circumstances. Your clients should seek independent taxation advice about the implications of investing through a TPC Facility.

Past performance of any product described on this site is not a reliable indication of future performance.

Other than Macquarie Bank Limited ABN 46 008 583 542 (Macquarie), any Macquarie Group entity noted on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity's obligations do not represent deposits or other liabilities of MBL and MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity.

Macquarie Group, its employees and officers may have interests in the financial products referred to in this information (including interests opposite to your clients) by acting in various roles (including as director, investment banker, underwriter or dealer, holder of principal positions, broker, lender or adviser) and may receive fees for so acting. may receive remuneration from the issue of the TPC Facility and may pay commission to introducing advisers (including related entities of Macquarie). The commissions and remuneration are more fully described in the PDS.

This information is intended for Australian residents only. The distribution of the information in jurisdictions outside Australia may be restricted by law and persons into whose possession the information comes should inform themselves about, and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of an applicable jurisdiction.

Information is current as 24 May 2011 but is subject to change without notice.