Tailored Investment Solutions Global Credit and Absolute Return Units Series 1
A 3 year exposure to a basket of global funds
The objective of the Global Credit and Absolute Return Units Series 1 Units is to deliver positive returns to Investors over a 3 year period. The Units aim to achieve this by offering leveraged exposure to a diversified basket of global investment funds (the Reference Basket) that have a primary investment mandate to invest in global fixed income investments and/or are absolute return focused.
The Units provide Investors with notional exposure to the Reference Basket for a period of 3 years, and the right to purchase, at Maturity, using any gains made on the Units over the Investment Term, shares in a leading Australian company, Telstra Corporation.
Other features include:
- potential for enhanced exposure to the Reference Basket (because the Issue Price is a fraction of the Notional Exposure);
- potential for returns at Maturity which are determined by reference to the Reference Basket over the Investment Term.
- potential for two Coupon payments during the Investment Term.
Each Unit is a separate right to receive the Delivery Asset and certain related rights under a deferred purchase agreement as described in the PDS.
After Maturity, Investors will receive the Delivery Assets, unless they request for the Issuer to sell the Delivery Assets on their behalf and receive the Sale Monies (which includes a deduction for any Delivery Costs).
Summary of the key features are as follows
| Launch Series 1 | ||
| Reference Basket: Equally weighted exposure to the following 4 global funds | Weighting on Commencement Date | Fund |
| 25% | PIMCO Funds Global Investors Series Plc – Income Fund | |
| 25% | Old Mutual Global Investors Series Plc – Global Equity Absolute Return Fund | |
| 25% | Jupiter JGF Dynamic Bond | |
| 25% | GAM Star PLC – Credit Opportunities EUR | |
| Averaging of the Reference Basket | Yes, over the first two months and over the last two months of the Investment Term. | |
| Issue Price | $0.066 | |
| Notional Exposure | Each Unit provides a Notional Exposure of $1.00 per Unit. This means that if you were to purchase 100,000 Units, which would have a total purchase price of $6,600 (plus any Adviser Fee as agreed with your Financial Adviser), your investment exposure to the Reference Basket for the purposes of calculating Coupons and Final Value would be $100,000. This enhanced level of exposure to the Reference Basket will magnify both the gains and losses of the Units. | |
| Coupons | The Units may pay two Coupons of up to 10% of the performance of the Reference Basket Value. The First Coupon is calculated at the end of the first year of the Investment Term and the Second Coupon is calculated at the end of the second year of the Investment Term. Please refer to the PDS for the Coupon calculation formula. | |
| Final Value at Maturity | The Final Value per Unit is determined by the movements in the Reference Basket over the investment term less any Coupons paid in the first and second year of the Investment Term in accordance with the following formula: Final Value = 90% x [Max (0, (Notional Exposure x (Final Reference Basket Value/Initial Reference Basket Value – 1) – Gross First Coupon – Gross Second Coupon))] The 90% in the above formula for Final Value has the effect of reducing the Final Value by the amount of the Performance Fee. The Performance Fee is 10% of the amount that would otherwise be payable. |
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| Delivery Assets at Maturity | On Maturity, it is intended that a parcel of ordinary shares in Telstra Corporation (ASX Code: TLS, website: www.telstra.com.au) (Delivery Asset), equal in value to the Final Value per Unit multiplied by the number of Units held by an Investor. The performance of Units is not directly affected by the performance of the TLS shares up to the Maturity Date. However, after the Maturity Date, the value of the security will be determined by the price of the Delivery Asset as traded on the ASX. |
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| Agency Sale Option | After Maturity, the Delivery Assets are transferred to Investors or sold on their behalf if they request to use the Agency Sale Option. | |
| Performance Fee | The amount of each Coupon and the Final Value will each be reduced by an amount on account of a Performance Fee, which is retained by the Issuer. The amount of the Performance Fee on each Coupon will be 10% of the amount which would otherwise have been payable had the Performance Fee not been deducted. The Performance Fee on the Final Value will be 10% of the amount which would otherwise have been payable had the Performance Fee not been deducted. Other fees and charges may apply. Please refer to the PDS. |
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| SMSF Eligibility | Yes | |
Overview of each global fund
| Global Fund | Description |
| PIMCO Funds Global Investors Series Plc | The objective of the Fund is to seek high current income, consistent with prudent investment management. The Fund will utilise a global multi-sector strategy that is founded on the principle of diversification across a broad range of global fixed-income securities. |
| Old Mutual Global Investors Series Plc – Global Equity Absolute Return Fund | The Fund aims to deliver an absolute return by investing in a market neutral portfolio of actively traded large capitalisation global equities. The Absolute Return Fund is managed using highly developed proprietary systematic techniques that exploit short term anomalies. |
| Jupiter JGF Dynamic Bond | The Fund aims to achieve a high income with the prospect of capital growth from a portfolio of investments in global fixed-interest securities. The Fund will invest in higher yielding assets, high yield bonds, investment-grade bonds, government bonds, preferred shares and convertible bonds. |
| GAM Star PLC – Credit Opportunities EUR | The Fund’s objective is to achieve long-term capital gain. The Fund invests in income bearing or accruing securities with fixed principal amounts including government bonds, corporate bonds, junior debt securities, preferred shares, convertible securities and contingent capital notes. |
Key risks include:
- Investors’ returns (including Coupons) are affected by the performance of the Reference Basket. There is no guarantee that the Reference Basket will perform well.
- There is no guarantee that the Units will generate returns in excess of the Total Investment amount. Investors may lose their entire Total Investment Amount.
- There is no minimum Final Value. The Final Value depends on the performance of the Reference Basket Value.The Final Value will be equal to zero if there has not been an increase in the Reference Basket Value (subject to averaging) greater than the Gross First Coupon and Gross Second Coupon over the full Investment Term.
- There may be no Coupons where the Reference Basket Value has remained constant or declined over the Investment Term. The Coupons are capped at 10% of the performance of the Reference Basket Value (before the subtraction of the Performance Fee).
- There is no established market for the Units. The Issuer has the right to accept or reject redemptions in its absolute discretion. Generally, the Issuer would only reject or defer an Issuer Buy-Back request if it is unable to adequately unwind its hedging arrangements.
- Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty.
- If the Issuer defaults under the Hedge, then the Hedge Counterparty will have the right (but not the obligation) to terminate the Hedge of that Series. If the Hedge is terminated, it will be an early unwind and the value derived will be the early termination value of the Hedge. This may be significantly less than the value that the Investor could expect on Maturity, and may be zero.
- Investors are limited in their recourse against the Issuer (for example, if the Issuer defaults under the Units or the PDS) to only the amounts recovered or recoverable under the Hedge corresponding to their Series of DPA. Otherwise, Investors have no recourse to the Issuer personally, and cannot claim any amounts greater than the Final Value plus any Coupons that were, or could have been due and owing.
Please refer to Section 8 “Risks” of the PDS for a complete description of all the risks that apply to an investment in Tailored Investment Solutions Global Credit and Absolute Return Units Series 1.
For full details about the investment including all of the risks associated, investors should read the Product Disclosure Statement.
Product Disclosure Statement (PDS)
To download a PDS dated 1 May 2018 click here.
To download the Supplementary PDS dated 21 June 2018 click here.
To download the Supplementary PDS dated 26 June 2019 click here.
To download the Change of Arranger Supplementary PDS dated 6 April 2020 click here.
To download the Supplementary PDS dated 12 May 2021 click here.
To download a website notice for investors, click here.
Important Information
Tailored Investment Solutions Global Credit and Absolute Return Units Series 1 are issued by Tailored Investment Solutions Pty Ltd (ACN 169 320 905) (the “Issuer”) and arranged by Finexia Securities Limited (ABN 61 608 667 778, AFSL 485760).