UBS Warburg launches high yield product
UBS Warburg has launched an investment product that it says has the potential to provide retail investors with returns of up to 15 per cent.
The product, Yield Enhanced Securities, allows investors to invest a minimum of $10,000 in shares from a selected list of 17 blue chip shares, with each share assigned a fixed yield return substantially more than the current cash rate yield.
UBS Warburg head of equity structured products Peter Rozenauers says the product suits the experienced investor who is concerned about the prevailing uncertainty in the share market and would like to safeguard investments against a drop in share value.
"Investors are cashed up at the moment and are saying they want to take equity risk and be compensated by solid returns on their investment," Rozenauers says.
"The outlook for 2001 is different from what it was last year before the dotcom crash, and investors are expressing uncertainty while fixed interest yields are falling in Australia. This product is tailored for the local conditions," he says.
The underlying feature of the product, according to Rozenauers is that it provides a relatively high yield return that reflects the volatility of the share.
Where, for example, an investor buys $10,000 worth of shares from one of the 17 blue chip companies at their share price, they will at the end of the 12 months receive, if the share maintains or betters its price, the original $10,000 plus the fixed yield return rate assigned to it at the time of buying.
The offer is set to issue on March 8 and will close to the public on March 2.
Recommended for you
Retail investment into private credit funds could surpass that of sophisticated investors, according to ASIC, but the regulator admits it is unsure how and where these individuals are first being introduced to the vehicles.
With the high cost of advice keeping young Australians locked out of advice, a fintech provider has said digital advice is key for licensees to capture this unadvised demographic.
ASIC chair Joe Longo has announced he will step down at the end of his term, departing the corporate regulator in May 2026.
When it comes to the phase-out of AT1 bonds, Schroders fixed income manager Helen Mason has urged financial advisers to sell up sooner rather than later or risk capital losses.
