Instreet Investment has launched a new product that it says will provide extra income supplementing any potential returns such as dividends and franking credits – but Instreet has also acknowledged the risks that come with geared investments.
Instreet Income Instalments or I³, issued by Citigroup Global Markets Australia, would pay additional quarterly income to its investors in return for accepting an annual cap of 10 per cent on the performance of the shares.
“Like a normal resetting instalment warrant you will get all the benefits of direct share ownership with internal gearing for about 50 per cent of the cost,” Instreet managing director George Lucas said.
However, he said returns were not guaranteed and that because the investment was geared, both positive and negative share price movements were enhanced.
“Investors will also not receive the benefit of increases in the underlying shares above the appreciation cap,” he added.
I³ would be listed on the Australian Securities Exchange (ASX) over 13 of the exchange’s top 50 companies, as well as the SPDR S&P/ASX200 Fund on the ASX.
