Sequoia Launch Units – Series 53 – Best of Gold vs S&P500
Sequoia Launch Series 53 is a new investment enabling investors to gain exposure to the Best of either Gold or the S&P 500 with a 14% Volatility Target, with minimal upfront capital and limited downside risk.
The Units in Sequoia Launch Series 53 offer investors exposure to the Strongest Performing Strategy as measured by the:
- S&P500 Price Return Index subject to a 14% Volatility Target (“S&P500 Strategy”); and
- The London Bullion Market Association (“LBA”) Gold Price PM subject to a 14% Volatility Target (“Gold Strategy”).
The Units offer a potential uncapped Performance Coupon at Maturity dependent on the performance of the Strongest Performing Strategy at Maturity as reduced by a 10% Performance Fee and adjusted for changes in the AUD/USD exchange rate.
- The “Best Of” Series
- Strategy (there are 2 Strategies in total)
- Reference Assets
- Currency Exposure
- Limited recourse Loan
- Annual Interest Rate on Loan (payable for the full 3 years in advance)
- Application Fee
- Risk Management Fee (payable for the full 3 years in advance)
- Performance Fee
- Volatility Mechanism
- Volatility Target
- Maximum Participation Rate
- Margin Calls
- Provides exposure to the underlying Strategy with the strongest performance selected from 2 Strategies
- Each Strategy provides exposure to a single Reference Asset with 14% Volatility Target:
1. S&P500 with 14% Volatility Target (S&P500 Strategy)
2. Gold with 14% Volatility Target (Gold Strategy)
- S&P500 Price Return Index
LBA Gold Price PM
- 5.95% p.a.
- 0.7% p.a.
20 December 2019
21 January 2020
20 February 2020
Initial Strategy Value
Gold Strategy Level
S&P 500 Strategy Level
Final Strategy Value
Final Strategy Value
Final Strategy Value
Launch Series 53 Performance
|Date||Gold Strategy||S&P500||Indicative Unit Value*||Gross Performance|
* 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
Key risks include:
- Your return (including any Coupons) is affected by the performance of the Reference Assets (S&P500 and Gold). There is no guarantee that the Reference Assets will perform well.
- The Units have varying levels of exposure to the Reference Assets depending on volatility due to the variable Participation Rate. It operates by varying the exposure that the Units will have to the Reference Asset depending on the Realised Volatility of each Reference Asset and the Target Volatility. There is the risk that the Participation Rate could drop to significantly below 100% during the Investment Term in which case Investors will not gain the full benefits of an increase of the value of the Reference Asset.
- Investors should note that there is a lag in measuring the Realised Volatility of the Reference Asset. This means that where there has been a period of high Realised Volatility, the Investor’s exposure to the Reference Asset will be low, regardless of whether the Reference Asset is performing positively or negatively.
- There will be no Performance Coupon payable if the Series Performance for each Strategy is negative on the Performance Coupon Determination Date.
- The Performance Coupon is determined by reference to the Initial Strategy Value and Final Strategy Value for the Strongest Performing Strategy at Maturity as well as changes in the AUD/USD exchange rate. An increase in the AUD/USD exchange rate will decrease the Performance Coupon whilst a fall in the AUD/USD exchange rate will increase the Performance Coupon.
- The Initial and Final Strategy Values are subject to averaging. Averaging may decrease the impact of an increase in the relevant Reference Asset during the Investment Term.
- 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;
- Gains and losses may be magnified by the use of a 100% limited recourse Loan; 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. Please refer to Section 2 “Risks” of the Master PDS for more information.
Please refer to Section 4 “Key Risks” of the Term Sheet PDS and Section 2 “Risks” of the Master PDS for more information.
Units in Sequoia Launch Units – Series 53 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 Launch Units – Series 53 can only be made by completing an Application Form attached to the Term Sheet Product Disclosure Statement (“TSPDS”), after reading the Term Sheet PDS dated 12 November 2019 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 Launch Units – Series 53. Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS