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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.
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
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Russ Koesterich,
CFA, iShares Global
Chief Investment
Strategist |
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*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.
Information relating to iShares is prepared by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975, AFSL 230523, a wholly owned subsidiary of BlackRock, Inc. (collectively "BlackRock").
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.
Neither the performance nor the repayment of capital or any income (dividends) of an iShares fund is guaranteed by any BlackRock entity. Past performance is not a reliable indicator of future performance.
Shares of an iShares fund trade on ASX at market price (not, net asset value ("NAV")). Shares may only be redeemed directly from an iShares fund by persons called "Authorised Participants".
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.]
This information is intended strictly for use by wholesale clients / professional investors in Australia, as defined in the Corporations Act 2001, and is not for retail distribution in Australia.
MSCI and the MSCI Index are trademarks and servicemarks of MSCI Inc. ("MSCI"). Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's ("S&P"), a division of The McGraw-Hill Companies, Inc. ("McGraw-Hill"). ASX® is a registered trademark of ASX Operations Pty Limited ("ASX Operations") and has been licensed for use to S&P. The "Russell Index" is a trademark of Russell Investment Group ("Russell"). "FTSE®" is a trademark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited ("FTSE") under license. The FTSE China 25 Index is calculated by FTSE. The iShares funds are not sponsored, endorsed, issued, sold or promoted by MSCI, S&P, McGraw-Hill, ASX Operations (including its affiliates), Russell or FTSE. Each of these companies has licensed the use of their respective trademarks and servicemarks to BlackRock Institutional Trust Company, N.A. None of these companies make any representation, warranty or condition regarding the advisability of buying, selling or holding shares or units in the iShares funds.
© 2011 BlackRock. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
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