Macquarie has launched a new structured product that combines the safety of a guaranteed bank deposit with a small allocation to benefit from any growth in the domestic equity market.
The Macquarie Deposit plus Access 200 consists of a 90 per cent allocation to a term deposit, with the remaining 10 per cent used to invest in an option allowing access to positive performance of the S&P/ASX 200 index.
“Investors want something that is very simple and transparent right now. That is definitely what this is and I think most people will be able to get their minds around it,” Macquarie Funds Group head of retail distribution structured and specialist investments Irene Deutsch said.
The deposit portion of the investment will return a fixed interest amount of 0.8 per cent less than the bank bill five-year swap rate, determined at the time of application.
The 10 per cent allocation will deliver a return consisting of the S&P/ASX 200 index’s outperformance, when compared to a set hurdle rate of between 120 and 130 per cent above the closing level of the index on the issue date.
“If the market is at 4000, investors would want it to get to about 5000 between now and maturity and… if it got up to 6000 say, they could benefit from the 1000 difference,” Deutsch said.
The allocation to the option is also guaranteed and the term to maturity on the product is five years.
The product was made available to the public on November 13 and is being offered in two tranches to begin with, closing on November 26 and December 3.
“These close dates are more like rate setting dates,” Deutsch said.
The offering has already been included on a few dealer group approved product lists and is likely to be included on major platforms in the near future.
