Investec Capital Markets’ new Geared Growth FTSE/JSE Africa Top40 investment offering

Investec Capital Markets is launching a new 3.5 year investment offering, the Top40 Geared Growth, which targets South African investors who want to be invested in the FTSE/JSE Africa Top40 index in a manner where their downside risk is limited. This follows the recent successful launch of an investment offering linked to foreign equity indices, the International Titans Basket Limited (Titans), which raised over 60 million Australian Dollars.

The Top40 Geared Growth requires a minimum investment of R100 000 and is suited for the more aggressive investor who holds a long term positive view on domestic equities. This investment protects the investor by as much as 20% from a fall in the FTSE/JSE Africa Top40 Index. In addition, the investment offers 1.4 times geared growth in the FTSE/JSE Africa Top40 index to a maximum potential investment return of 63%. That is, positive index returns are multiplied by a factor of 1.4 times, therefore a 40% index return would equate to a Top40 Geared Growth investment return of 56%.

“In the wake of global market volatilities, South African individual investors divested from equities and have been overweight in cash. Investment products such as the Top40 Geared Growth offer clients efficient alternative investment opportunities,” said Japie Lubbe of Investec Capital Markets.

The South African market consensus according to a recent fund manager survey expects equities to yield a capital return of 10-15% over the next 12 months and Top40 Geared Growth is aimed at investors who share this long term view.

Investors in the recent International Titans Basket offering obtained 100% AUD principal protection from downside equity risk and also had the benefit of 129% upside participation in an equally-weighted basket of foreign indices (namely, the S&P 500 Index and the Dow Jones Global Titans 50 Index) over a 5.5 year term.