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Home» Personal» Investments» Specialised investments» Unlisted» Macquarie Tailored Portfolio Collar

Tailored Portfolio Collar

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

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Features
How do they work?
More information

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.

Investors can choose to borrow up to 100 per cent of the purchase price of a portfolio, with 95 per cent protection⁺ at expiry^, and no risk of risk of margin calls.

Using TPCs, investors will also receive any ordinary cash dividends and distributions and franking credits* throughout the life of the 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^ with no risk of margin calls
Flexible investment time frames (between six months and five years), and the freedom to tailor the portfolio protection level⁺ and individual caps
Receive any ordinary cash dividends and distributions and franking credits*
Protection⁺ is provided on a portfolio basis at expiry which may reduce the cost of protection⁺
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 investment will be
if you set a cap price for each share and/or managed fund in the portfolio, you 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
you will have to pay all amounts owing in relation to your investment, even if the investment performs poorly
in certain circumstances, which include events nominated by us and events beyond your control, your options and loans may be terminated or lapsed early. In some circumstances, you may be required to make further payments to us
the more highly geared your 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 you (although we will exercise any discretions in a reasonable manner) and
if we fail to perform our obligations, you may not receive any payment which you are entitled to receive from us.

You should carefully consider the risks that may affect the value of your investment before making any investment decision. You 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?

Upfront	During the investment	On expiry
Choose your preferred portfolio protection level⁺ (up to a maximum of 100%) You have the option to borrow up to 100%^ of the purchase price of the portfolio Contribute the difference between the portfolio investment amount and the loan amount (if any) plus any upfront interest and protection⁺ costs You have 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 TPC matures, you can choose to: extend the 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, you will need to pay the balance to us from your own funds.

Upfront

During the investment

On expiry

Choose your preferred portfolio protection level⁺ (up to a maximum of 100%)
You have the option to borrow up to 100%^ of the purchase price of the portfolio
Contribute the difference between the portfolio investment amount and the loan amount (if any) plus any upfront interest and protection⁺ costs
You have 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 TPC matures, you can choose to:

extend the 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, you will need to pay the balance to us from your 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 funds 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	Investors may set their investment term for any period from six months to five years
Minimum investment amount	Minimum investment amount of $1 million, with a minimum value of $125,000 for each asset
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

Contact us

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1800 080 033

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02 8232 6158

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Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice contained in this website and before making any investment decision we recommend that you consider whether it is appropriate to your situation and seek appropriate financial, taxation and legal advice. We recommend that you read our Financial Services Guide before deciding whether to obtain financial services from us. If an offer document is available for a product referred to on this site, you should read it before making any investment decision. Information on this website is intended for residents of Australia only.

Except for Macquarie Bank Limited (MBL) (Australian Credit Licence (ACL) 237502) ABN 46 008 583 542, any Macquarie entity referred to 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. 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 should obtain a copy of the PDS and consider it carefully before making any investment decision. In particular, you 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 you currently have or what you want and need for your financial future. Macquarie is not a fiduciary or adviser to you. You should consider the appropriateness of this information having regard to your objectives, financial situation and needs. We recommend you obtain independent 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 you will depend on your individual circumstances. You 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 yours) 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. Macquarie 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.