In the past many investors have built their investment portfolios using assets such as property, bonds and shares.
As a result, investors have often been exposed to the unpredictability of these markets, without having easy ways to further spread their risk, while still accessing potentially high returns.
The ability to reduce portfolio risk is even more relevant in today’s uncertain investment climate.
The Macquarie Titan Trust is a new investment that offers you a way to diversify your portfolio beyond investments in traditional asset classes such as equities and bonds by gaining exposure to a diversified portfolio of international hedge funds.
The Macquarie Titan Trust is an Australian unit trust that will derive its returns from investment in Macquarie Offshore Funds No.2 Limited ("the Fund of Funds"). The Fund of Funds is managed by Macquarie International Capital Advisors Pty Limited, a wholly-owned subsidiary of Macquarie Bank Limited.1
A brief summary of the offer is set out below. For more information you should refer to the Investment Statement.
The Investment
You can invest in the Macquarie Titan Trust with as little as $5,000.
Term
Six years from 20 February 2002 - but with the ability to dispose of part or all of your investment early.2
Trust Assets
Shares in the Fund of Funds. The Fund of Funds, in turn makes investments which include a range of international hedge funds selected by Macquarie International Capital Advisors Pty Limited covering several different investment strategies.3
Simulated Performance4
As the trust has no operating history, the trust performance can only be simulated. A simulated performance analysis for the six-year period ending 30 September 2001 produced a compound annual return, after fees and expenses of 15.9% per annum. The charts (below) illustrate how this performance compares with investments in selected New Zealand and global bond and equities markets.5
As you can see, the simulated performance shows an excellent return but perhaps even more importantly it displays lower volatility (a measure of risk) than sharemarket investments as measured by major indices.
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Optional Investment Loan
If you wish, you can borrow up to 100% of the amount you invest in the trust from Macquarie Finance (NZ) Limited, subject to certain terms and conditions.
Tax-effectiveness
The Macquarie Titan Trust has been designed for New Zealand resident investors. For an explanation of the tax-effectiveness of an investment in the trust please refer to the Investment Statement, speak to your financial adviser, or refer to the registered prospectus, which sets out a full statement of the tax effectiveness of an investment in the Trust.
Capital Protection
If you invest in the trust, and hold your investment until maturity, then your investment capital can have the benefit of capital protection. The capital protection is an unsecured and conditional obligation of Macquarie Bank Limited incorporated in Australia. For more information as to this obligation of Macquarie Bank Limited, please refer to the Investment Statement.
Further Advice
It is recommended that investors seek independent financial and tax advice before investing in the Trust or borrowing under the optional investment loan.
Questions
Should you have any questions about investing in the trust, or utilising the investment loan, or if you would like a copy of the Investment Statement, please contact your financial adviser, ask Macquarie on 0800 367 036, or email us at titan@macquarie.com.
Please note, this offer is for a limited time and ends 20 February 2002.
An investment in the trust can only be made on the application form attached to the Investment Statement. Macquarie Financial Products Management Limited, a wholly-owned subsidiary of Macquarie Bank Limited, is the manager and trustee of the trust.
The minimum application amount is $5,000. Investments in the trust are not deposits with or other liabilities of Macquarie Bank Limited nor any member of the Macquarie Bank Group, and are subject to investment risk, including possible delays in repayment. Neither Macquarie Bank Limited, Macquarie Financial Products Management Limited nor any other member company of the Macquarie Bank Group nor any other person guarantee any particular rate of return or the performance of the trust nor do they guarantee the repayment of capital from the trust.
Notes
1 Macquarie Bank Limited is incorporated in Australia
2 Some restrictions and fees apply to early disposals - see the Investment Statement
3 The Fund of Funds portfolio can also include investments in foreign exchange contracts, cash and term deposits.
4 Simulated performance is an illustration only and is no guarantee of future results. More detailed information about the methodology used to calculate the simulated performance information is set out in the registered prospectus for the Trust.
5 To provide a common base for comparison, the same currency hedging methodology as is proposed for the Fund of Funds has been applied to the foreign currency denominated indices.
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