RBS Self Funding Instalments are a simple and effective way to obtain geared exposure to ASX listed shares, while still receiving the FULL benefits of share ownership such as any price movements, dividends and franking credits.
Key features and benefits
More than 40 ASX listed companies are covered by RBS Self Funding Instalment Warrants.
No requirement for interest payments – Interest payments on Self Funding Instalments are capitalised directly into the loan and serviced by any dividends paid.
No margin calls, and no additional payments if the value of the security falls below its purchase price.
In-built Stop Loss at 10% above the initial Instalment Payment (the loan) allows investors to access Self Funded Instalments without the prohibitively high (put option) protection costs.
Non-recourse loan – allows SMSFs to utilise this product as way of gearing their investment portfolio.
Tax deductable interest – provides investors with a tax effective investment.
Options for investment:
1 – Cash purchase at 40-50% partial payment of current share price
2 – Use an existing shareholding to increase your investment by 40-60% with no further outlay
3 – Cash Back: Free up cash locked-up in an existing shareholding while maintaining your original holding.
Transactions 2. and 3. typically do not attract Capital Gains Tax (see Section 7 of the PDS). In order to claim a tax deduction for the interest paid, withdrawn cash needs to be used for investment purposes.
What do we get paid?
Wealth Focus will not charge the adviser fee (3%). Wealth Focus may receive a trailing commission of up to 0.25%pa. This commission is paid by the product provider and is NOT an additional charge to the investor.