Views Article – Sharenet Wealth

South Africa

Global Top 20 Structured Product

Sasfin’s [SFN] bookbuild is currently underway for their new Global Top 20 Structured Product.

More-and-more investors are becoming increasingly uneasy with the state of the local economy and are looking to diversify their hard-earned wealth by increasing their offshore exposure. This product fits that mould and has the added advantages of downside protection, and not having to take funds offshore.

Product Summary

  • Sasfin invests in a basket of 20 global companies
  • You receive returns based on the best-performing 8 companies
  • Potential return of 100% (in USD)
  • Downside protection (first 20% of your capital)
  • Investment term is 5 years
  • Currency protection (only positive returns are exposed to currency movements)

How does it work?

Sasfin invests equally in a basket of 20 global blue-chip companies that are based on their best 5-year view and quoted in US Dollars. If the performance of the basket is positive (in USD) after 5 years, you receive the performance of the best 8. If the Rand has also weakened, your returns will be further enhanced and vice versa if it has strengthened.

If the performance of the basket is negative (in USD) after 5 years, you will either get all your capital back in ZAR (if the basket has not fallen by more than 20%) or only share in the losses above 20%. (if the basket has fallen more than 20%).

Let’s look at some practical examples:

Below are the different possible scenarios. You will notice that your capital is only exposed to currency movements if the returns of the basket are positive. If it is negative, you are not affected.

image1

The basket comprises of equal weightings in the below 20 companies*:

image2

*List of companies are subject to change before the launch of the note

Product information

  • Minimum investment amount is R250 000 (with increments of R50 000 thereafter)
  • No foreign exchange clearance required
  • Early redemption is available
  • Closing date for the bookbuild is 18 April 2019
  • Fees: Asset management & distribution fee is 0.9% (excluding VAT)

What you need in order to apply

  • An existing Sharenet account (If you do not, please make contact so that we can open your account in time before the closing date)
  • The amount you want to apply for needs to be available in cash in your Sharenet account
  • Complete the 1-page application form

In conclusion, this product is a very easy and effective way of gaining access to offshore shares without having to take your money offshore. This allows Trusts and Corporate entities to also invest in the product. It also has the added advantage of protecting you for the first 20% of losses in the unfortunate event that it should happen.

With concerns about how our economy will grow being on everyone’s mind, and considering the current strength of the Rand, the timing of the product launch is ideal in order to take advantage of diversifying your portfolio in a cost-effective manner.

You can contact me at the below details in order to apply and assist you with the necessary.

stephan@sharenet.co.za | 021 700 4815

 

Stephan

Stephan Maritz
Portfolio Manager

Stephan is a portfolio manager and full-time trader. He developed his passion for the markets while working in the Stockbroking division of Standard Bank and is especially passionate about CFD trading. Stephan studied at the University of Stellenbosch and completed a BComm Honours (Business Management) with a focus in Portfolio Management and Bonds. He has also passed the JSE Equity Trader’s Exam, RE5 (Representative) and RE1 (Key individual) Exams as well as the Registered Persons Exams (RPEs) in order to give advice on equities.
 


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