Macquarie Investment Warrants
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Features
Macquarie Investment Warrants are a new type of longer-dated warrant. Macquarie Investment Warrants offer your clients a convenient way to gain exposure to a range of Australian listed securities and indices over the medium to long term, with only part of the value of the exposure amount required to be paid upfront and no further payment obligations.
Key benefits
- Leveraged exposure to a range of Australian shares and indices*.
- One upfront payment and no further payment obligations.
- No margin calls.
- Flexible investment terms – from one to five years.
- ASX quoted – daily pricing available.
- Sell on the ASX during the term of the investment.
- May be eligible for SMSFs.
At a glance
| Investment name | Macquarie Investment Warrants (put and call warrants) |
| Securities available | Available over a range of Australian shares and indices |
| Investment amount | Primary market application: $100,000 (exposure amount). However, Macquarie may, at its discretion, accept applications for an amount that is less than the minimum investment amount |
| Term | One to five years |
| Payment |
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| Adviser commission | 0-1.1% (incl GST) |
| ASX traded | Investors may be able to sell the Warrants on the ASX prior to the Warrant’s expiry date |
How do they work?
Upfront
- Your client chooses their underlying asset, exposure amount and investment term from one to five years.
- Your client’s choice of warrant should reflect their view of the relevant underlying asset (ie bullish or bearish).
- Your client obtains the opportunity to benefit from an increase in the value of the underlying asset at the expiry of the Warrant above the Strike Price (Call Warrant); or a decrease in the value of the underlying asset at the expiry of the Warrant below the Strike Price (Put Warrant).
- Only part of the value of the exposure amount is required to be paid upfront.
During the investment
- Your client’s Investment Warrants will be listed on the ASX, so they may be able to sell the Warrants on the ASX.
- Your client’s Investment Warrants will be exposed to the performance of the relevant underlying asset.
- Macquarie Investment Warrants are European-style warrants and can only be exercised at expiry.
At expiry
- At expiry of your client's Investment Warrants, they may choose to either physically or cash settle their investment (refer to section two of the PDS for more information).
- If no election is made, your client will receive an Assessed Value Payment, which will be approximately 95 per cent of the Cash Settlement Amount.
Risks
Some of the significant risks of investing in Macquarie Investment Warrants include:
- the adverse performance of the relevant reference asset decreasing the value of the investment
- Warrants incorporate a high level of leverage (compared with a direct investment in the relevant reference asset) and should therefore be considered a high risk investment
- you and your client should also give careful consideration to the performance required of the relevant reference asset in order for your client to break even in relation to an investment in a Warrant.
An investment in Warrants does not suit investors seeking a traditional investment product (such as shares). You and your client should refer to section three of the PDS for more information about some of the significant risks of investing in Macquarie Investment Warrants.
Contact us
Call: 1800 080 033
Overseas: +61 2 8245 4903
Fax: +61 2 8232 6158