UBS and local investment manager Mason Stevens have launched a leveraged capital-protected warrant linked to a portfolio of 20 ASX-listed shares. UBS is the issuer of the product and Mason Stevens the arranger.
Equity Insulator Instalments are familiar investments to Mason Stevens, which issued a series of similar products with Citi last November. The three-year warrants require investors to borrow up to 110% of the investment value and prepay interest on the loan upfront, resulting in a tax deduction under Australian law.
"Structured products continue to play an important role in investor portfolios. The key is choosing products that are transparent and which offer fair terms," said Mason Stevens MD Thomas Bignill. He said the advantage of Equity Insulator Instalments is that investors can walk away at any time without further cash outlay. The underlying structure is liquid and visible and there are no margin calls or cash locks, he said.
At maturity, the product pays any gains in the portfolio above the loan amount and dividends from the 20 equities in the portfolio.
The warrants will be ASX-listed. The initial offer period ends on 29 June.
This product will appear shortly in Recent Additions (Australia).