Macquarie has launched a new structured product that gives investors a "walk away" option while providing an opportunity to take advantage of any market recovery.
The Macquarie Flexi 100 Trust (Macquarie Flexi 100) allows investors to borrow to invest in the Australian and US markets with the protection of a limited recourse loan.
Investors are also able to walk away from the investment loan without incurring any additional costs, including break costs.
"So this allows them to walk away in the early part, in the upside if that has occurred, but not take any break or shortfall costs when they walk away," Macquarie Funds Group head of retail distribution Irene Deutsch said.
A fixed distribution of 4.5 per cent of the investment amount, payable annually in arrears, can be redeemed each year. However, this is forfeited if the investor cashes out during a part year.
According to Deutsch, the product was developed after feedback from advisers and clients.
"The market had been asking for simple and transparent products. They also wanted a product that allowed them to participate in any market recovery, but in a protected fashion," Deutsch said.
"The feedback was that they didn't want to be locked into anything."
The Macquarie Flexi 100 is open until 30 June 2009 and matures at 30 September 2014.
Investors must borrow 100 per cent of the investment amount. A loan establishment fee of 2 per cent of the loan is payable on application.
It is also open to self-managed superannuation fund investors, as the limited recourse loan complies with legislative requirements.
"Even though it has only just been launched it has been well received by the adviser market and we think we have created a product that people really want," Deutsch said.
