The MQ KINETIC Emerging Markets VIII Fund provides a new and innovative way to gain exposure to the performance of the MSCI Emerging Markets Index, with participation of up to 170% to applicants who use the optional Investment Loan.
The efficient fund structure allows investors to benefit from potential positive market developments whilst limiting their downside risk with an expected positive return at the end of the Investment Horizon of the Fund.
Use the online investor calculator to see why an investment in the MQ KINETIC Emerging Markets VIII Fund can be an attractive way to gain equity market index exposure.
Optional Investment Loan available to approved applicants to increase investment exposure.
| Issue Date 2 March 2012 |
The following table contains a summary of the key terms of the MQ KINETIC Emerging Markets VIII Fund. Investors should read the MQ KINETIC Offering Memorandum and the Emerging Markets VIII Fund Term Sheet before deciding whether or not to complete the MQ KINETIC Application Form to apply for Shares in the Fund. You should seek advice from your financial adviser before deciding to apply for Shares in the Fund.
| Fund name | Emerging Markets VIII Fund within the KINETIC Segregated Portfolio of MQ KINETIC SPC |
|---|---|
| Reference investment | MSCI Emerging Markets Index (Bloomberg Code 'MXEF') |
| Offering currency | Australian Dollar |
| Investment horizon | 2 March 2012 to 9 December 2014 |
| Issue price | AUD 1,000 per Share |
| Target Base Return | The Target Base Return is between AUD 1,120 and AUD 1,170 per Share (after payment of all Fund fees and expenses but before tax at Investor level). |
| Additional participation | The indicative level of participation in the performance of the Reference Investment will be 26% and the payoff range (bounded by a performance hurdle and a performance cap) will be 107% to 160% over the Investment Horizon. |
| Fund domicile | Cayman Islands |
| Fund fees | circa 0.75% pa |
| Subscription fees | Up to 0.75% of Investor’s Initial Investment Amount |
| Minimum subscription | AUD 100,000 (AUD equivalent of USD 100,000) |
| Redemptions / liquidity | Semi-annual liquidity starting 30 June 2013 (with 15 Business Days’ notice); Break costs or gains may apply to any redemptions. |
| Tax | Qualifies as non-Swiss closed-end non-distributing collective investment scheme. Net taxable income per Share in the Fund to be reported annually to the Swiss Federal Tax Administration. |
| ISIN / Valor | KYG6318A1792 / CH14231291 |
| Offer period for the Fund* | 2 November 2011 to 24 February 2012 |
| Issue date | 2 March 2012 |
* The Offer Period and the Issue Date for the Fund may be changed in the discretion of the Manager. The Fund reserves the right to not issue Shares on the Issue Date and to close the Offer Period early.
The following table contains a summary of the key terms of the AUD Optional Investment Loan to invest in the MQ KINETIC Emerging Markets VIII Fund. Investors should read the Loan and Security Agreement before deciding whether or not to apply for an Optional Investment Loan. You should seek advice from your financial adviser before deciding to apply for an Optional Investment Loan.
| Investment Loan | AUD limited recourse loan for investment in MQ KINETIC – Emerging Markets VIII Fund maturing on 9 December 2014 |
|---|---|
| Security | Secured only against Investor’s Shares – no other recourse to the Investor |
| Lender | Euro Fin Co Pty Ltd – a Macquarie Group entity |
| Loan Currency | Australian Dollars |
| Interest Rate | 7.85% per annum |
| Interest payments | No ongoing interest payments as interest expense accrues and is payable at the earlier of Investment Loan maturity and redemption of Shares. |
| Loan to Value Ratio | Investors can select appropriate level of leverage (‘Loan to Value Ratio’ or ‘LVR’) to match their risk profile (up to 85% of Initial Investment Amount). |
| Minimum Loan Amount | AUD 100,000 |
| Early Repayment | Upon redemption of Shares before the maturity date of an Investment Loan, outstanding principal and interest on the Investment Loan must be repaid. Break fees or gains may apply. |
| Repayment at Maturity | At Investment Loan maturity date (being the end of the Investment Horizon), outstanding principal and interest on the Investment Loan must be repaid out of the redemption proceeds of the Investor's Shares which are expected to exceed the outstanding principal and interest on the Investment Loan (subject to the creditworthiness of the Fund’s counterparties). |
| Annual Reporting | The outstanding Investment Loan amount and the interest expense accrued will be reported to all Investors with an Investment Loan on an annual basis. |
| Tax Treatment for Swiss tax residents | Properly reported interest expense on the Investment Loan should be tax deductible for Swiss individual investors for income tax purposes if these interest expenses do not exceed a threshold equal to the qualifying annual gross income from movable and immovable assets (including notional rental income from owner occupied property) plus an amount of CHF50,000 minus interest expense from other debts. |
There are risks associated with borrowing to invest. Use of an Investment Loan can increase an investor's exposure to their investment in the Fund but can also magnify losses. In order for investors with an Investment Loan to break even at the end of the Investment Horizon (excluding taxation considerations and the time value of money), the value of their Shares in the Fund will need to have increased by more than the interest due to be paid and other costs.