Westpac Protected Equity Loan
Westpac Protected Equity Loan facility lets individuals, companies, trusts and SMSFs build a diversified portfolio of securities with up to 100% capital protection at maturity.
- Select from a range of ASX-listed securities, including ETFs
- $50,000 minimum loan amount; $10,000 minimum per parcel of securities
- Choose from 50% up to 100% level of capital protection at maturity
- Loan term up to 5 years
- Receive any ordinary dividends or distributions during the life of the loan
- Evaluate options to reduce the interest rate or upfront protection costs
- Performance of one parcel of securities will not impact the performance of another parcel
- Tax considerations may include potential interest deductibility and franking credits (conditions apply). Please refer to the detailed tax section in the PDS.
Risks associated with a Westpac Protected Equity Loan include:
- The Westpac Protected Equity Loan is a geared investment. Gearing can magnify both losses and gains
- You will lose money on an investment in a loan if the securities do not appreciate in value by an amount (plus ordinary dividends you receive) that exceeds the interest you pay on your loan (and any interest loan), brokerage and fees and costs associated with the loan
- There are material risks associated with early termination, including a risk that you will be charged significant break costs. In particular, capital protection does not apply if a loan terminates before maturity
- By entering into a loan, you will also be exposed to market risk
- In certain circumstances, we may exercise our discretion to trigger the early repayment of all or part of your loan.
Reduce your costs
- Reduce protection costs by lowering your protection level
- Reduce the interest rate (or up-front protection costs) by giving up some of your potential returns at maturity.
What if the price of a share falls below its protection level (at maturity)?
Performance of one parcel of securities will not impact the performance of another parcel. (A 'parcel' is all securities in the same class issued by the same listed entity). In calculating the protection amount, gains made on one share won't be offset by any losses made on another.
So if the price of a share at maturity is below its protection level, Westpac can sell the share and will accept the purchase price you paid in recompense for the loan.
Flexible interest rate options
- Fixed or annual resetting
- Pay interest annually in advance or monthly in arrears
- Borrow to pay interest, which would be paid annually in advance and the principal repaid monthly.
The Westpac Protected Equity Loan Product Disclosure Statement sets out the detailed information on fees and charges, your interest obligations and the factors which affect the calculation of the interest rate for this loan.
Pricing varies depending on a number of factors, including securities, protection level and time horizon.
Things you should know
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 is the issuer of the Westpac Protected Equity Loan facility Product Disclosure Statement (PDS) dated 22 July 2013. The PDS is no longer current and is available for historical purposes only.
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.