Global Dispersion – Series 5
The Units in Global Dispersion – Series 5 offer investors the ability to gain exposure to the Dispersion of a Reference Basket of listed Global Shares (each an “Underlying”) during the period from the Commencement Date to the Maturity Date (being a period of approximately 2 years) based on the full leveraged Investment Amount. Investment in the Units is by way of a 100% LVR limited recourse loan, with Investors only being required to pay an Application Fee and Prepaid Interest following a successful application for Units.
The Units provide investors with a potential uncapped Performance Coupon at Maturity based on the full leveraged investment amount depending on the performance of Dispersion of the Reference Basket during the Investment Term provided the realised level of Dispersion at Maturity is greater than the Hurdle. The Performance Coupon is also adjusted for changes in the AUD/USD exchange rate during the Investment Term.
|Basic Materials||Chemicals||BASF SE||BAS GY||Germany|
|Koninklijke DSM NV||DSM NA||Netherlands|
|Communications||Internet||Tencent Holdings Ltd||700HK||Hong Kong|
|Amazon.com Inc||AMZN UW||USA|
|Telecommunications||Nokia Oyj||NOKIA FH||Finland|
|Consumer, Cyclical||Auto Parts & Equipment||Continental AG||CON GY||Germany|
|Retail||Cie Financiere Richemont SA||CFR SE||Switzerland|
|The Swatch Group AG||UHR SE||Switzerland|
|Chipotle Mexican Grill Inc||CMG UN||USA|
|Consumer, Non-Cyclical||Bio Technology||Regeneron Pharmaceuticals Inc||REGN UW||USA|
|Healthcare-Services||Lonza Group AG||LONN SE||Switzerland|
|Fresenius Medical Care AG Co KGaA||FME GY||Germany|
|Fresenius SE Co KGaA||FRE GY||Germany|
|Pharmaceuticals||Roche Holding AG||ROG SE||Switzerland|
|Energy||Oil & Gas||Repsol SA||REP SQ||Spain|
|Financials||Banks||HSBC Holdings PLC||HSBA LN||UK|
|China Construction Bank Corp||939 HK||Hong Kong|
|Bank of China Ltd||3988 HK||Hong Kong|
|Technology||Semiconductors||NVIDIA Corp||NVDA UW||USA|
|Software||Microsoft Corp||MSFT UW||USA|
|Dispersion||The dispersion of a basket of securities is typically measured by how much the return of each individual security in the basket differs, in absolute terms from the average return of the overall basket over a given period of time. Each of these return differentials are averaged and the greater the average, the higher the measure of dispersion|
|Potential Performance Coupon||Yes, the potential for one uncapped Performance Coupon based on the realised level of Dispersion at Maturity LESS the Hurdle, as adjusted for changes in the AUD/USD exchange rate|
|Hurdle*||The Hurdle is determined by the Issuer on the Commencement Date. As at the date of the PDS the Hurdle would be 28%. The Issuer will not proceed with the issue of Units if the Hurdle cannot be set at or below 28% on the Commencement Date|
|Currency Exposure||Yes. The potential Performance Coupon at Maturity is adjusted for changes in the AUD/USD exchange rate during the Investment Term.|
|Limited recourse Loan||Yes|
|Annual Interest Rate on Loan (payable for the full 2 years in advance)||3.75% p.a. (7.5% payable upfront for the full 2 year Investment Term)|
|Total Investment cost for the full 2 year period||8.6%|
|Break- Even Level Performance Coupon at Maturity||36.60%|
|Commencement Date/Issue Date||30 June 2020 or as soon as reasonably practicable thereafter as determined by the Issuer and as notified to you|
|Maturity Date||30 June 2022|
Global Dispersion – Series 5 Performance
|Date||Reference asset (Realized dispersion)||Indicative Unit value 1||Gross Performance 2|
1 – Unit Value: Investors please note this is a theoretical investment maturity value. This investment is designed to be held to maturity. Any investors seeking to redeem prior to maturity may receive an amount significantly different to the Indicative Unit Value stated
2 – Gross Performance only becomes positive once the reference asset performance level exceeds the hurdle level of 28%
Key risks include:
- Your return (including any Performance Coupon) is affected by the performance of the Dispersion of the Reference Basket (globally listed Shares) and whether this is greater than the Hurdle at Maturity. There is no guarantee that the Dispersion of the Reference Basket will perform well.
- There will be no Performance Coupon payable if the Dispersion of the Reference Basket is below the Hurdle at Maturity.
- The potential Performance Coupon is determined by reference to the Dispersion of the Reference Basket, the Hurdle as well as changes in the AUD/ USD exchange rate. An increase in the AUD/USD exchange rate between the Commencement Date and the Maturity Date will reduce the Performance Coupon whilst a decrease in the AUD/USD rate between the relevant dates will lead to an increase in the Performance Coupon;
- There is no guarantee that the Units will generate returns in excess of the Prepaid Interest and Fees, during the Investment Term. Additionally, in the event of an Investor requested Issuer Buy-Back or an Early Maturity Event you will not receive a refund of your Prepaid Interest or Fees.
- Gains (and losses) may be magnified by the use of a 100% Loan. However, note that the Loan is a limited recourse Loan, so you will never be required to pay more than the Prepaid Interest Amount and Fees at Commencement.
- Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty; and
- the Units may mature early following an Early Maturity Event, including an Adjustment Event, Market Disruption Event or if the Issuer accepts your request for an Issuer Buy-Back. Please refer to Section 2 “Risks” of the Master PDS for more information.
Units in Global Dispersion – Series 5 are issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936 ) (the “Issuer”) and arranged by Sequoia Asset Management Pty Ltd (ACN 135 907 550, AFSL 341506)(the “Arranger”). Investments in the Sequoia Dispersion – Series 5 can only be made by completing an Application Form attached to the Term Sheet PDS, after reading the Term Sheet PDS dated 28 May 2020 and the Master PDS dated 14 August 2017 and submitting it to Sequoia A copy of the PDS can be obtained by contacting Sequoia Asset Management on or contacting your financial adviser. You should consider the Term Sheet & Master PDS’ before deciding whether to invest in Units in Global Dispersion – Series 5. Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS