Flexi Investment Strategies

Australian and global exposures. 100% leverage. 100% principal protection.

The product allows investors to borrow to gain enhanced exposure to a range of domestic and international growth opportunities, with 100% protection of their loan principal amount.

Investors, including self-managed super funds, have the flexibility to ‘Walk-Away’ without incurring additional costs should their circumstances or market conditions change.

Opportunity to invest in a broad sharemarket portfolio where you can keep gains and walk away from the losses.

How Does it Work?

  1. The bank will lend you $100,000 (or a figure that you choose – min $25,000) to invest in portfolio of ASX 200 or S&P500 (broad US share market).
  2. Each year you will pay 6.7% interest which can be paid monthly.
  3. Each year you will receive a 4% distribution.
  4. Each year you can claim the interest paid as a tax deduction.
  5. At selected windows (quarterly) during the term you can sell the investment or alternatively it will be sold for you at the end of the term. You are taking the view that the ASX 200 or S&P500 will rise during this period. Note the S&P500 investment will also benefit from a decline in the Australian dollar.
If the market does not rise or indeed falls you simply walk away from the loan as it is a no recourse loan...ie) not your problem.

What Happens at End of Term?

Now let us assume that we stay in the investment until the end of the term. However, remember you can walk away at any time.

S&P 500 Option 

Note the calculation is the same for the S&P500 investment however at that time you then convert back into Australian dollars. Therefore should the exchange rate decline it will be to your advantage however the opposite applies to any appreciation in the exchange rate.

Please contact us at Shartru Wealth on [email protected] or 1300 478424 for more info.

The advice provided on this page is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstances.