Investors use rolling SFIs to buy shares in several instalments and fund the purchase through a loan. For these SFIs the gearing level is set by UBS at 50 per cent and dividends paid on the underlying shares are used to reduce the loan balance.
UBS said it developed the new series in response to demand from advisers for simple and cost-effective gearing strategies that enabled investors to invest in high-yielding Australian companies with a moderate level of gearing.
"We have restructured our self-funding instalments in response to changes in the market risk profile in recent times," UBS head of structured product sales Mark Small said.
"The traditional structure of SFIs involved very long-term risk protection, which has become prohibitively expensive for investors."
