The Commonwealth Bank has launched a structured investment facility that offers investors flexibility through two core products, consisting of a protected loan and options.
The Options and Lending (Opals) product offers investment strategies titled Protected Lending, Covered Call Writing, OTC (over the counter) Options Purchase and OTC Put Writing.
Opals allows trustees of self managed superannuation funds (SMSF) the opportunity to gear into equity, according to Commonwealth Bank head of structured investment sales Moghseen Jadwat.
“All the benefits of gearing such as leverage, enhanced income and the ability to bring more franking credits into the fund are really powerful arguments for why you would gear a super fund.
“You can have two portfolios now with Opals that allow the client to have protection in their company stock and protection through their SMSF so at some point in time the non-super money will hopefully merge with the super money and improve their overall nest egg,” he said.
Another benefit of the Opals offering is that it also eliminates margin calls, according to Jadwat.
Investors are able to take a loan term anywhere from three days to five years, generally geared somewhere between 50 and 80 per cent under the Opals product, Jadwat said.
