Macquarie yodels for new income investors
Macquarie Equity Markets has released a second series of ALPS securities, offering an introductory income yield of 12 per cent, with a capital guarantee over the six and a half year term of the listed securities.
The performance of ALPS 2 is based on a reference portfolio of 80 of Australia’s 150 largest stocks. Strong performance by these shares will see the income yield increase by 1 per cent each year, potentially reaching 18 per cent in the final half year of the investment.
However, if just seven of the stocks in the portfolio fall by more than 45 per cent after the first six months, where a fixed 6 per cent yield applies, then the yield will fall to zero for the remainder of the term.
Investors will, however, still receive the 6 per cent return from the first six months, and will get back their initial investment.
ALPS 2 will be listed on the Australian Stock Exchange and Macquarie has promised to make a market for those investors wanting to cash out early, although the capital guarantee will not apply to those who don’t stay the course.
Macquarie Equity Markets executive director, Jeff Weeden, said ALPS 2 might suit investors who relied on income, but wanted better returns than those available from term deposits or bonds.
“Because this is a medium to long term investment, it can also work as part of a self managed superannuation fund,” Weeden said.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
