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Flashcards in gold Deck (16)
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1

investment term

3 years

2

strucutre of investment

100% limited recourse loan

3

Interest cost

5.95% p.a. interest cost payable upfront covering the 3 years

4

Risk management fee

0.70% p.a. risk management fee payable upfront covering the 3 years

5

application fee

2.2% application Fee (waived for retail investors)

6

total uprfront cost

Total upfront cost = 22.15%

7

Volatility Target mechanism

15%

8

Locked Levels

10%/20%/30%/40%/50%

9

frequency of observation

Observation Frequency is on a monthly closing basis
No margin calls
SMSF Eligible

10

At Maturity the investor receives

Max of either the Strategy Value performance at Maturity or the Max Locked Level, applied to the 100% leveraged investment Amount subject to changes in the AUD/USD exchange rate less a 10% Performance Fee.

11

define structred product

A structured product is a financially engineered investment product designed to provide investors with exposure to underlying assets. In this case you gain exposure to gold

12

define options

An option contract is a type of derivative investment that gives you the right but not the obligation to make a trade in an underlying investment at a specified date.

13

what is an otc

An OTC option, is an aption that is traded off-exchange, as opposed to a listed stock option. OTC options provide the advantage of complete customisation of the terms.

14

what does strategy value mean?

The initial strategy value is the exposure amount in this case $1.00 per unit.

15

what is the participation rate

The participation rate is the percentage of your exposure amount that is currently in the market. Participation rate can vary from 0% to 100% due to the target volatility mechanism

16

what does exposure mean?

The exposure amount is the $dollar value that you make your potential gains on. For example if you have 100k exposure and the fund goes up 10%, you would receive 10k before the performance fee. Leveraging is the use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable