Citi has released their new generation of Self Funding Instalments (SFI’s).
Recent changes allowing Self Managed Super Funds to invest in instalments and the clarification of the deductibility of interest on capital protected borrowings make it the right time to consider an investment in Citi SFI's.
Citi SFI's are the first SFI's to be structured to take advantage of these changes, therefore allowing you to maximise potential growth in this new environment.
SFI's are an increasingly popular and flexible investment product benefiting those seeking long-term geared exposure to the performance of shares in Australia's leading companies and indices. Investing in Citi SFI’s is a convenient way of borrowing to invest , with no intrusive credit checks, complicated loan documents, and no ongoing interest payment.
SFI's are similar to ordinary instalments in structure. The most significant variation is the treatment of dividends. Holders are entitled to dividends (including franking credits) however the cash component of a dividend will be used to reduce the loan amount rather than being paid in cash to the holder.
The loan amount for a SFI will generally increase once every 12 months, as funding costs are added to the total loan. Hence, over the life of the SFI, the loan amount will periodically decrease due to the payment of dividends from the underlying instrument, and increase by the amount of funding costs. Ideally the loan amount progressively reduces over the life of the SFI due to regular dividend payments exceeding interest and borrowing charges.
It is envisaged that during the life of the SFI the loan amount will decrease where the dividends outstrip the annual interest payments to the loan, representing a positively geared investment.
| For further information please contact Citi Retail Structured Products. | |||
| Phone: | 1300 30 70 70 | ||
| Email: | citifirst.warrants@citi.com | ||
| Mail: | GPO Box 557 Sydney NSW 2001 | ||
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