Westpac Self-Funding Instalments
Westpac Self-Funding Instalments (Westpac SFIs) give investors leveraged exposure to ASX-listed securities with no risk of margin calls. Ordinary dividends or distributions paid on the underlying security are used to reduce the loan amount.
- Borrow to invest in shares
- Available to SMSFs
- Buy directly on ASX
Buy directly on the ASX
Greater potential returns
For typically a fraction of the cost of the underlying securities you could immediately obtain many of the benefits of ASX-listed security ownership - like potential for distributions, dividends, franking credits (conditions apply) and capital growth. Distributions, dividends and franking credits should be included in an investor's assessable income. Please refer to the detailed tax section in the PDS.
No margin calls
You can enjoy many of the potential benefits of geared exposure to ASX-listed securities without margin calls.
Optional second payment
You can let Westpac sell the underlying securities at maturity (which could have tax consequences) instead of paying the second instalment.
Easy to trade
Westpac SFIs are traded on the ASX so you can buy or sell at anytime, directly on the ASX.
Protection through a limited recourse Loan
You access leveraged exposure to the underlying securities through a limited recourse Loan from Westpac. If the price of the underlying security falls below the Loan Amount, you can walk away at expiry with no additional future payment required.
Receive the Underlying Securities at any time
You can obtain full legal title to the underlying securities at any time by repaying the Loan Amount.
Unlock the value of existing security holdings
Where you already own securities, you can apply for Westpac SFIs as a Securityholder Applicant transferring securities you already hold to the Security Trustee and drawing down a Loan. This allows you to maintain your exposure to existing holdings while freeing up cash to reinvest or diversify without creating a capital gains event (not available to Superannuation entities).
Interest date and changes to loan amount
Every 30 June the loan amount increases with the addition of one year's worth of prepaid interest. It decreases each time the underlying security pays a dividend or distribution by that amount.
Things you should know
Any reference to taxation matters is a general statement only and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and proposed announced tax amendments. The individual situation of investors may differ and investors should seek independent professional tax advice on any taxation matters.
Westpac Banking Corporation ABN 33 007 457 141, AFSL 233714 (Westpac) is the issuer of the Westpac Self-Funding Instalments Product Disclosure Statement dated 1 July 2013 and any supplementary or replacement product disclosure statements issued from time to time ('PDS').
Consider the PDS before making any decision to invest. This information does not take into account your personal objectives, financial situation or needs so you should consider its appropriateness having regard to these factors before acting on it.