A sophisticated investment choice for wholesale Australian investors

 

What Macquarie Torque offers

Shares

Purchase or BYO shares
Receive many of the benefits of share ownership
Optional loan to invest

Hedge price risk

Manage a portion of your downside price risk through knock-out put options or vanilla put options

Income

Receive fixed coupon(s) in exchange for giving away potential share upside
Receive ordinary dividends and potential franking credits1

By agreeing to pay Macquarie any price gains above a level of their choosing, Macquarie Torque can provide investors with the potential to earn an enhanced income yield which can be taken in cash or used to offset the cost of any price protection.

Macquarie Torque has been designed to provide wholesale investors with a sophisticated investment tool that can be customised for each investor’s needs. 

Whether you are looking for the opportunity to generate an enhanced income yield, participate in the capital growth of shares on an unleveraged or loan principal protected basis, or just manage the price risk of existing shareholdings, Macquarie Torque has the flexibility to provide an investment solution.

Purchase or BYO your choice of securities and receive ordinary dividends and potential franking credits.1

With Macquarie Torque, you have the flexibility to choose the term, level of loan principal protection as well as the borrowed amount.

Derivative contracts utilised to provide different risk-return outcomes.

As with most investments, there are some key risks you should be aware of when investing in Macquarie Torque, including:

  • swaps may reduce exposure to price upside on your shares which may be more than the income you receive in return
  • downside protection may expire if a knock-out event occurs
  • geared trades will magnify exposure to any downside price risk
  • credit risk on Macquarie Bank.

About Macquarie Torque

How Macquarie Torque works

Macquarie Torque provides investors with the opportunity to enter into various combinations of swaps, vanilla put options, knock-out put options and loans in relation to qualifying ASX-listed shares. This flexibility means advisers can tailor a range of equity based solutions for their clients, depending on their client’s financial objectives and risk appetite. For example:

  • investors who think the price of a particular share will be relatively flat over their investment horizon could look to enhance their income yield by entering into a swap. Under a Swap, the investor would receive one or more coupons. In exchange, the client would need to pay us any gains in that share above a specified price at expiry (similar to a buy-write strategy)
  • investors who think the price of a particular share will be relatively flat or positive over their investment horizon, but want some cost-effective protection against small drops in price during the term. These investors could invest in knock-out put options which, provided no knock-out event occurs, will provide protection at expiry against drops in the price of particular shares, but only down to a specified price
  • investors who want to obtain leveraged exposure to shares on a loan principal protected basis and who want the flexibility to reduce the cost of that protection by foregoing some of the upside potential on those shares.

Torque also provides investors with the ability to gain exposure to ASX-quoted securities through the use of leverage and/or loan principal protection. 

 

Choice of underlying assets

Torque is generally limited to stocks in the S&P/ASX 20 Index and selected ETFs. To find out whether your chosen stock is available, please contact Macquarie.

Product documents

Download the Macquarie Torque Facility Terms & Conditions or contact us to obtain the latest Product Disclosure Statement.

Access Product Ruling PR 2017/8 here.

The Product Ruling is only a ruling on the application of taxation laws and will only be binding on the Australian Taxation Office if the investment through a Torque Facility is implemented in the specific manner outlined in the Product Ruling. The Commissioner of Taxation (Commissioner) does not sanction, endorse or guarantee this product. Further, the Commissioner gives no assurance that the product is commercially viable, that charges are reasonable, appropriate or represent industry norms, or that projected returns will be achieved or are reasonably based. Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends you consult an independent financial (or other) adviser for such information.

 

Who may Macquarie Torque be suitable for?


Given the flexibility to customise your investment structure, Macquarie Torque can be tailored to suit a range of different wholesale investors’ objectives. Potential investors should be familiar with, and have experience in investing in, investment strategies that involve the combining of derivatives, loans and shares.

Find out how we can help


If you'd like to speak to a Macquarie specialist about how our expert team can help your business, get in touch.