Australian structured product issuer Instreet has partnered with Citi to launch a new product offering investors an income via leveraged exposure to equities.
Issued by Citi, Instreet Income Instalments (I3) are 10-year annually resetting warrants offering leveraged exposure to 13 of the ASX's top 50 companies as well as the SPDR S&P/ASX200 Fund.
Instreet said the product has the benefits of an ASX-listed instalment warrant, as well as the potential for additional income beyond the usual dividends and franking credits. Utilising a call overwriting strategy, the product pays an additional quarterly coupon to investors in return for investors accepting an annual cap of 10% on the performance of the shares.
"Like a normal resetting installment warrant you will get all the benefits of direct share ownership with internal gearing for about 50% of the cost," Instreet MD George Lucas said.
However, he said returns were not guaranteed and that because the investment was geared, both positive and negative share price movements were enhanced.
Investors will also not receive the benefit of increases in the underlying shares above the appreciation cap, he added.
The minimum investment amount is A$2,500 and the offer closes on 4 May.
This product appears on the Australian database (Recent Additions).