iShares
iShares Trading Ideas
Russ Koesterich's fortnightly market update
21 October 2011

iShares Trading Ideas

Russ Koesterich, iShares Global Chief Investment Strategist, discusses the Great Idle; a US economy stuck in neutral.

Russ continues to believe that another U.S. recession does not appear imminent however, the consumer is facing multiple headwinds, not the least of which is a debt load that is still grossly out of proportion to income.

Download Market update


As the popularity of ETFs in Australia grows, iShares ETFs are increasingly being used in structured products to assist brokers in finding targeted exposures. The Royal Bank of Scotland recently issued Self Funding Instalment Warrants (SFIs) over the iShares S&P/ASX 20 (ILC) and the iShares S&P/ASX High Dividend (IHD).

The information set out below regarding ILCSRX and IHDSRX SFIs** has been provided by The Royal Bank of Scotland plc***:

 

A view on Australian large caps via SFIs

Self Funding Instalments (SFIs) are a way to gain long-term geared exposure to ASX-listed shares and Exchange Traded Funds (ETFs), whilst receiving many of the benefits of share ownership, including exposure to share price movements, dividends and franking credits.

IRESS code: ILCSRX

Key points about ILCSRX:

  • can leverage SMSFs
  • interest may be deductible
  • contains embedded stop loss feature
  • dividends used to repay the Instalment payment (Loan) and investors receive the franking credits (where applicable)

Key points about ILC:

  • aims to deliver the performance of the S&P/ASX 20 Index (Index) #
  • the Index is made up of the 20 largest stocks by market cap
  • largest holdings - BHP, CBA, WBC, ANZ, NAB, and WES

# before fees and expenses

You should ensure that you have read the Product Disclosure Statement dated 20 September 2011 for ILCSRX (PDS), including the Risk section, before making any decision to invest in Self Funding Instalments.

For more information on ILCSRX, you should refer to the PDS or contact RBS on 02 8259 2017.

 

Diversify your equity income via SFIs

IRESS code: IHDSRX

Key points about IHDSRX:

  • can leverage SMSFs
  • interest may be deductible
  • contains embedded stop loss feature
  • dividends used to repay the Instalment payment
    (Loan) and investors receive the franking credits
    (where applicable)

Key points about IHD:

  • designed to deliver the performance of the S&P/ASX Dividend Opportunities Index (Index) #
  • the Index is designed to serve as a benchmark for Australian income-seeking investors
  • sector limits of 20% underweights financials to provide high yield and diversification
  • largest holdings - Navitas, Monadelphous, Westpac, United Group, IRESS Market Tech and Coca-Cola Amatil

# before fees and expenses

You should ensure that you have read the Product Disclosure Statement (PDS), dated 20 September 2011 for IHDSRX including the Risk section, before making any decision to invest in Self Funding Instalments.

For more information on IHDSRX, you should refer to the PDS or contact RBS on 02 8259 2017.

 

Minis and warrants over iShares ETFs are also offered by Macquarie Bank and CitiFirst Warrants.**

If you have any questions please don't hesitate to contact the iShares team on 1300 474 2737.

Regards,

Tim Sparks
National Broking Strategy & ETF Research

Russ_Koesterich Russ Koesterich,
CFA, iShares Global Chief Investment
Strategist

Quick links

iShares S&P/ASX 20
iShares S&P/ASX
High Dividend

For more information

iShares.com.au
1300 iShares
(1300 474 2737)
iShares sales team

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© 2011 BlackRock, Inc. All rights reserved.  

*Source: Bloomberg, year to 19 September 2011.

** BlackRock makes no representations or warranties regarding the advisability of investing in these products. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of these products. Information regarding these products has been provided by the respective product issuers and no warranty of accuracy or reliability is given by BlackRock for this information.

***The Royal Bank of Scotland plc (ABN 30 101 464 528, AFSL: 241114) ("RBS"). Information regarding ILCSRX and IHDSRX in this communication has been provided by RBS. RBS has not taken into account your individual objectives, financial situation or particular needs. Before you make an investment decision, you should consider the appropriateness of an investment in, or advice relating to, the Self Funding Instalments in light of your particular investment needs, objectives and financial circumstances. RBS, to the maximum extent permitted by law, accepts no liability or responsibility whatsoever for any loss arising from any use of the information provided by RBS contained in, or attached, to this document. RBS also makes no representation or warranty as to the affairs of any iShares exchange traded funds identified in this document. You should obtain independent advice on the nature, activities and prospects of an investment in the Self Funding Instalments. Nothing in this document is a recommendation by RBS, its related entities, its associates or any other person to invest in the Self Funding Instalments or in any iShares exchange traded funds.

Before investing in an iShares exchange traded fund, you should carefully consider whether such products are appropriate for you, read the applicable prospectus available at iShares.com.au and consult an investment adviser.
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BlackRock believes this information is correct at the time of issue, but no warranty of accuracy or reliability is given and no responsibility arising in any way for errors or omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock. This information is general in nature, and has been prepared without taking into account any individual’s objectives, financial situation, or needs. Transaction costs are incurred when buying or selling shares of an iShares fund on the Australian Securities Exchange ("ASX") and brokerage commissions may be charged if such trades are done through a broker.

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An iShares fund is not sponsored, endorsed, issued, sold or promoted by the provider of the index which a particular iShares fund seeks to track. No index provider makes any representation regarding the advisability of investing in the iShares funds.]

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