gold Flashcards

(16 cards)

1
Q

investment term

A

3 years

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2
Q

strucutre of investment

A

100% limited recourse loan

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3
Q

Interest cost

A

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

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4
Q

Risk management fee

A

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

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5
Q

application fee

A

2.2% application Fee (waived for retail investors)

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6
Q

total uprfront cost

A

Total upfront cost = 22.15%

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7
Q

Volatility Target mechanism

A

15%

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8
Q

Locked Levels

A

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

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9
Q

frequency of observation

A

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

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10
Q

At Maturity the investor receives

A

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.

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11
Q

define structred product

A

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

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12
Q

define options

A

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.

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13
Q

what is an otc

A

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.

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14
Q

what does strategy value mean?

A

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

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15
Q

what is the participation rate

A

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

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16
Q

what does exposure mean?

A

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