South Africa - Reitway Global Leveraged Equity Structured Product

Overview

Fund Asset Value

ZAR 67.44 million

Risk profile

Aggresive

Minimum Investment

ZAR 100 000

The investment opportunity

The Reitway ESP is a Johannesburg Stock Exchange (JSE) listed investment product issued by Investec Bank Limited that provides investors with a geared exposure to the Reitway BCI Global Property Fund. Additional leverage of between 27% and 33% magnifies returns (and losses) and is aimed at investors seeking geared upside on a Global Property portfolio.

The instrument represents the Investor's rights to a parcel of Property Fund Units which are purchased using the funds received from the Investor and to an Over-the-Counter Put Option ovet the Units. This provides geared upside and downside return.

The Reitway ESP is subject to the listing requirements of the JSE giving Investors the ability to hold the Reitway ESP in their stock broking account.

An Investor may enter or exit the investment daily with Investec making a market with a bid to mid spread of 1%.

The daily price of the Reitway ESP is subject to various factors including prevailing interest rates and market levels. The put strike price is equal to the value of the Reitway BCI Global Property Fund units held, less the cost of any funding used to pay for gearing.

 

How does the gearing work?

All the funding provided by Investec is utilised to obtain additional exposure to the Reitway BCI Global Property Fund up to a pre-selected gearing ratio. Dividends and cash distributions on the Units are also used to obtain addional Units.

This investment may be appropriate for you if:

  • You expect Reitway BCI Global Property Fund will generate income returns greater than the interest levied to fund the addional debt provided by Investec
  • You are looking for an investment that offers geared upside (with the knowledge that gearing can also magnify any downside movements)
  • You have a minimum of R100 000 to invest.
  • You have an initial investment horizon in excess of three years (with immediate access to your funds if required)

This investment may not be appropriate for you if:

  • You want 100% principal protection under all conditions.
  • You require regular dividends and income.
  • You do not wish to take credit risk on Investec.
  • You do not wish to assume the risk of downside gearing.
 
 
Inception date:
25 August 2015
JSE category:
Specialist Product
Investec annual management fee:
0.35% (excl. VAT)
JSE code:
ESPIB1
Issuer:
Investec Bank Limited
Cost of Funding:
3 month Jibar + 250 BPS
ISIN Number:
ZAE000208922
Minimum initial investment:
ZAR 100 000
Funding to asset ratio:
27% - 33%
Valuation:
Traded daily on JSE
Minimum additional investment: 
ZAR 10 000
Underlying Holding:
Reitway BCI Global Property Fund
Investment Horizon:
Minimum 3-5 years
Bloomberg ticker:
RGLESPA: SJ
 

Disclaimer
The information contained in this communication in not intended to constitute advice in any form, including but not limited to investment, accounting, and tax, legal or regulatory advice.

As product supplier Investec is not in a position to have regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The material is based upon information that Investec considers to be reliable at the time of publication, but Investec does not represent that it is accurate or complete, and it should not be relied upon as such. All illustrations, forecasts or hypothetical data are for illustrative purposes only and are not guaranteed.

Investec accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this communication. Prospective Investors should be fully aware of the risks involved in dealing in financial products.

This product is not sponsored, endorsed, sold, or promoted by the Property Fund, as specified herein, or the relevant Property Fund sponsor, being the corporation or other entity that (a) is responsible for setting and reviewing the rules and procedures and the methods of calculation and adjustments, if any, related to the relevant Property Fund and (b) announces (directly or through an agent) the level of the relevant Property Fund on a regular basis. No Property Fund sponsor makes any representation whatsoever, whether express or implied, either as to the results to be obtained from the use of the Property Fund and/or the levels at which the Property Fund stands at any particular time on any particular date or otherwise. No Property Fund or Property Fund sponsor shall be liable (whether in negligence or otherwise) to any person for any error in the Property Fund and the Property Fund Sponsor is under no obligation to advise any person of any error therein. No Property Fund sponsor is making any representation whatsoever, whether express or implied, as to the advisability of purchasing or assuming any risk in connection with entering into any transaction in respect of this product. Neither Investec nor the Investor shall have any liability to the other for any act or failure to act by the Property Fund sponsor in connection with the calculation, adjustment or maintenance of the Property Fund. Investec has no affiliation with or control over the Property Fund or Property Fund sponsor or any control over the computation, composition or dissemination of the Property Fund. Although Investec will obtain information concerning the Property Fund from publicly available sources it believes reliable, it will not independently verify this information. Accordingly, no representation, warranty or undertaking (express or implied) is made and no responsibility is accepted by Investec as to the accuracy, completeness and timeliness of information concerning the Property Fund.

Investec Corporate & Institutional Banking, a division of Investec Bank Limited. Reg. No. 1969/004763/06. An Authorised Financial Services Provider and registered Credit Provider. A member of the Investec Group.