Sequoia Dispersion – Series 6

Sequoia Dispersion – Series 6

The Units in US Dispersion – Series 6 offer investors the ability to gain exposure to the Dispersion of a Reference Basket of listed US 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 Reference Basket consists of US listed Shares which have been characterised as having a large exposure to the “value” and “growth” investment style factors.

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.

  Reference Basket  
SectorGroupUnderlying
Reference Asset
Bloomberg CodeValue/Growth
CommunicationsInternetNetflix IncNFLX UW EquityGrowth
Amazon.com Inc AMZN UW EquityGrowth
Alphabet IncGOOGL UW EquityGrowth
TelecommunicationsVerizon Communications Inc VZ UN EquityGrowth
TechnologySemiconductorsAdvanced Micro Devices Inc AMDUW EquityGrowth
NVIDIA Corp NVDA UW EquityGrowth
SoftwareMicrosoft Corp MSFT UW EquityGrowth
Consumer, Cyclical RetailMcDonalds Corp MCD UN EquityValue
Walmart Inc WMT UN EquityValue
Costco Wholesale Corp COST UW EquityValue
Consumer, Non-Cyclical BeveragesThe CocaCola Co KO UN EquityValue
PepsiCo IncPEP UW EquityValue
FoodMondelez International Inc MDLZ UW EquityValue
Cosmetics/Personal CareColgatePalmolive Co CL UN EquityValue
Pharmaceuticals Johnson Johnson JNJ UN Equity Value
Cosmetics/Personal CareThe Procter Gamble Co PG UN Equity Value
DispersionThe 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

Refer to the Formulae & Calculations section of the PDS for a precise formula for calculating Dispersion.
Potential Performance Coupon Yes, the potential for one uncapped Performance Coupon based on the realised level of Dispersion at Maturity LESS the Hurdle.
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 ExposureAUD Hedged
Limited recourse LoanYes
Investment Term2 years
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)
Application Fee1.1% including GST
Total Investment cost for the full 2 year period8.6%
Break- Even Level Performance Coupon at Maturity36.60%
Margin CallsNo
SMSF EligibilityYes
Commencement Date/Issue Date30 September 2020 or as soon as reasonably practicable thereafter as determined by the Issuer and as notified to you.
Maturity Date30 September 2022

*Subject to change depending on the Hurdle Rate on the Commencement Date.

Downloads

To find out more, and to download a copy of the Term sheet PDS and Master PDS, please click on the links below

Sequoia Dispersion – Series 6 Performance

DateReference asset (Realized dispersion)Indicative Unit value 1Gross Performance 2
31-Oct-2020TBATBATBA

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.
  • 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.

 

For more information, please contact Sequoia at:
invest@sequoia.com.au and 02 8114 2222.

 

Units in Sequoia Dispersion – Series 6 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 6 can only be made by completing an Application Form attached to the Term Sheet PDS, after reading the Term Sheet PDS dated 28 August 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 Sequoia Dispersion – Series 6.  Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS