Macquarie MQ Gateway Trust

Macquarie MQ Gateway Trust (MQ Gateway)
Rebate (Investment)	0.909%
Rebate (Loan)	0.909%
Closing Date	CLOSED
Minimum Investment	$20,000
Minimum Loan	$100,000
Maturity Date	30 March 2012
Research		Lonsec (249kb)

	Download PDS (2.11mb)
	Structured Product Loan Doc (490kb)
	Recourse Loan Doc (944kb)

On 13 May 2008, the Federal Government issued a Press Release outlining a proposed change in the RBA Benchmark Rate applied to determine the amount of interest deductible under a capital protected borrowing. If enacted, the amendment will apply to capital protected borrowings entered into after 7:30pm on 13 May 2008 and will change the Benchmark Rate to the RBA indicator variable rate for standard housing loans (currently 9.45%).

The borrowing options available with MQ Gateway are not currently affected by the above changes as the indicative interest rates are currently below the proposed new RBA Benchmark Rate for capital protected borrowings.

This means that the total amount of interest paid may potentially be tax deductible.^*
Lonsec has released its review of the latest MQ Gateway Trust offering, which opens 05 May and closes 27 June 2008, assigning an overall ‘Recommended’ rating.

MQ Gateway Trust (MQ Gateway) provides investors with the opportunity to gain exposure to the growth potential of up to five different investment alternatives: MQ Gateway Emerging Markets Infrastructure, MQ Gateway Asian Hindsight, MQ Gateway Asian Cash Hoarders, MQ Gateway Agriculture and MQ Gateway Climate Change. Lonsec views the structure created by Macquarie as a relatively simple and efficient means of providing capital protected access to the investment alternatives.

Lonsec believes indices used in MQ Gateway are appropriate for investors seeking passive exposure to the asset classes offered by these investment alternatives and who believe that the market average provides a long-term efficient solution in these asset classes. The indices used in the investment alternatives offer broad representation, investability and transparency.

MQ Gateway Trust (“MQ Gateway”) provides access to compelling international investment ideas with Capital Protection^† and interest prepayment opportunities for SMSFs and investors.

Key features of MQ Gateway June 2008 include:

•

Access to a menu of five international investment ideas

■	Emerging Markets Infrastructure;
■	Asian Hindsight;
■	Asian Cash Hoarders;
■	Climate Change; and
■	Agriculture.

•

Capital Protection^† in 3.75 years

•

Choice of 90% or 100% Protection Levels

•

Approved non-SMSF investors may borrow 100% of the investment amount from Macquarie Bank

•

Approved SMSF investors may borrow to invest up to 100% of the protected amount from Macquarie Bank

•

Participation of up to 150%^# of the floored quarterly averaged investment growth

•

Quarterly averaging with protection from negative performance^{^}

Capital Protection^†
MQ Gateway is capital protected with a choice of Protection Levels (90% or 100%) on the Capital Protection Date. Investors can potentially accelerate their investment exposure by up to 150%^# by choosing to protect their investment at 90%.

By selecting this option investors take on some capital risk in return for an enhanced investment exposure.

Borrowing to invest
Approved investors can gain leveraged exposure to MQ Gateway with zero initial capital outlay, and also have the ability to prepay interest in the 07/08 financial year.

Menu of Investment Ideas°

The MQ Gateway menu for June 2008 includes five investment themes, which have been developed by MPML based on research published by Macquarie Research Equities (“MRE”), Australia’s No.1 equities research house°.

Gateway Trust	Exposure	Term (approx)	Protection Level	Participation rate
Emerging Markets Infrastructure	Exposure to the Macquarie Emerging Markets Infrastructure and Development Index. Designed to reflect the performance of emerging market domiciled companies which operate or develop infrastructure assets.	3.75 years	Class BD:100% Class BE:90%	85% - 105% 120% - 140%
Asia Hindsight	Weighted exposure to six Asian indices. The indices will be weighted according to performance, with a higher allocation to the best performing index and zero to the worst performer.	3.75 years	Class BF:100% Class BG:90%	80% - 100% 115% - 135%
Asian Cash Hoarders	Exposure to a basket of Asian companies across a range of industry sectors. All stocks are considered to have relatively high cash balances with the potential for relatively high cash yields.	3.75 years	Class BH:100% Class BI:90%	90% - 110% 130% - 150%
Climate Change	Exposure to the KLD Global Climate 100^SM Index, which includes a mix of 100 global listed companies providing near-term solutions to global warming while offsetting longer-term impacts of climate change through commercial activities in renewable energy, future fuels and clean technology.	3.75 years	Class BJ:100% Class BK:90%	90% - 110% 125% - 145%
Agriculture	Exposure to agricultural commodities, products and businesses through an equally weighted basket of two agricultural indices.	3.75 years	Class BL:100% Class BM:90%	90% - 110% 125% - 145%

Emerging Markets Infrastructure
Infrastructure, including transport, electricity, telecommunications and water, plays a vital role in the economic and social development of the world’s rapidly growing emerging economies. Demand for infrastructure in the emerging markets will expand significantly in the decades ahead, driven by factors such as strong economic and per capita income growth, growing populations, technological progress, climate change, urbanisation and growing congestion.
(Source: Macquarie Research Equities, “GEM infrastructure: a growth story”, March 2008).

Asian Hindsight
Asia is entering a new phase of economic growth, which could be very powerful. Rapid industrialisation of China continues to provide a positive impact on the region, with Hong Kong in particular benefiting from China’s strength through its trade and tourism links. The strength of China is also boosting other economies in North Asia, such as Korea, which has built world class export industries to service important markets.
(Source: Macquarie Research Equities, “Asia’s time has come”, April 2007).

Asian Cash Hoarders
Companies in Asia are stronger than they have ever been. Financial leverage has fallen significantly and cash flow generation has never been higher. Simple measures of valuation, particularly price-to-earnings, do not take this into account. Better measures, which are based on cash flow not earnings, and which are not skewed by changes in gearing, show Asian companies have never been cheaper than they are now.
(Source: Macquarie Research Equities; “Cash hoarders: Asia’s value hidden”, March 2008).

Climate Change
The impact of climate change is anticipated to be far reaching on society and the world’s economy. A higher incidence of droughts and floods due to climate change are impacting on agricultural supplies. Government support is driving energy sustainability legislation and incentives of alternative energies and media coverage have also increased the hype. Climate change solutions are incredibly diverse and provide opportunities for investors across a range of categories.
(Source: Macquarie Research Equities, “Climate change: the need for green”, March 2008).

Agriculture
Food prices are now rising rapidly after lagging behind other commodity prices. Tight inventories and the La Niña effect is likely to impact on supply and contribute to an increase in prices. In addition to this, consumer demand is still increasing at a rapid pace in China and India and increasing biofuel production is boosting demand for sugar, corn and vegetable oils.
(Source: Macquarie Research Equities; “More fun on the farm”, February 2008).

MQ Gateway may suit investors who:

•	Seek investment opportunities over the medium term
•	Wish to diversify their existing investments with international markets
•	Would like to borrow to invest and potentially claim tax deductions*
•	Are looking for capital protection^†
•	Have a self managed super fund ('SMSF')

MQ Gateway Trust June 2008 at a Glance

Offer Opens

05 May 2008

Offer Closes

27 June 2008

Unit Issue Date

9 July 2008

Loan Drawdown Date

30 June 2008

Term

3.75 years

Capital Protection Date⁺

30 March 2012

Loan Maturity Date

30 March 2012

Distributions

Liquidity

Monthly redemptions

Minimum Investment

$20,000

Minimum Investment to be Eligible for a Loan

$100,000

Fees and Expenses

See Section A4 of the PDS for information

Withdrawal Fee

See Section A4 of the PDS for information

Adviser Remuneration

Upfront adviser fee:	1.00% (incl. GST) of the Application Amount
Adviser trailing fee:	0.25% p.a. (incl. GST) of the Application Amount paid annually in advance from the first anniversary (reduced to reflect any redemptions)
Upfront Loan fee:	1.00% (incl. GST) of the Investment Loan Amount
Loan trail fee:	0.25% p.a. (incl. GST) of the Investment Loan Amount paid annually in advance from the first anniversary (reduced to reflect any prepayments)
Upfront adviser discretionary payments:	Macquarie may pay to your adviser, out of its own funds, a discretionary payment up to 0.35% (incl. GST) of the aggregate Application Amount.
Fees and Other Costs:	See Section A4 of the PDS for more information.

Reporting on your investment

•	View monthly NAV performance on the website www.macquarie.com/mqgateway
•	Investors will also be able to access an annual investment statement via Macquarie website

Risks of investing

Risks apply to an investment in MQ Gateway. For more information regarding risks and other matters, please read Section A3 and B2 of the PDS.

How to Invest

Download the MQ Gateway PDS (Part A and Part B). Read these documents and complete the Application Form in Part B of the PDS and any relevant loan documents, or you may apply online at www.macquarie.com.au/mqgateway. Successful online applicants will receive a $25 cash payment from Macquarie Bank (conditions apply).
Be sure to include 100PercentInvesting as your adviser to receive your cash rebate.

Borrow to invest and loan options

Approved investors can gain leveraged exposure to MQ Gateway with zero initial capital outlay through a Macquarie Structured Product Investment Loan (“Investment Loan”) provided by Macquarie Bank, providing the ability to pre-pay interest in the 07/08 financial year.

SMSFs may also be eligible to borrow to invest up to 100% of the protected investment amount via the MQ Limited Recourse Loan.

Loan options
Macquarie Bank provides investors with the following Investment Loan options:

Interest Rate Plan Number	Interest payment plan	Indicative interest rate on the Investment Loan where Investment Amount is less than $500,000	Indicative interest rate on the Investment Loan where Investment Amount is $500,000 or greater
1	Investment loan – pre-pay interest annually in advance	9.20%	8.70%
2	Investment Loan - with a 100% Interest Assistance Loan, with monthly repayments	9.20%	8.70%
3	MQ Limited Recourse Loan - prepay interest for 3.75 years in advance	7.45%⁺	6.95%⁺

No cash distributions are intended to be paid before the Capital Protection Date. As a result you will need to use your own financial resources to pay any interest amounts during the loan(s) terms.

1. Investment loan
Investors have the option to prepay interest annually in advance in June each year.

If selecting Interest Rate Plan Number 1 or 2, you may borrow up to your investment amount ($100,000 or more) from Macquarie Bank. This means that, for a 90% protected class, you may borrow above your Protection Level. Investors should note however that, should their borrowing exceed their protected amount, Macquarie Bank will apply a stringent credit test that must be passed in order for this loan to be granted. Please also note that if the value of the investment at maturity is insufficient to meet the value of the loan, you may have a 10% shortfall at maturity that you will have to pay^†. Investors wanting to utilise the Investment Loan should read the Loan and Security Agreement and apply using the application form attached to it, or online at www.macquarie.com.au/mqgateway.

An investment amount of $500,000 or more will qualify for a discounted interest rate of 0.50% from the standard rate.

2. 100% Interest Assistance Loan (“IAL”)
Investors who utilise the 100% IAL (Interest Rate Plan Number 2) will be able to fund 100% of their interest payment due on 30 June 2008 on their Investment Loan for the twelve month period from 30 June 2008 to 30 June 2009.

The IAL is repayable in twelve equal monthly instalments of interest and principal. Interest payments will be direct debited from an investor’s nominated account on the last business day of each month, commencing 31 July 2008. Subject to credit approval, the IAL may be utilised to fund subsequent annual interest payments, however Macquarie Bank will only offer investors the IAL going forward if investors meet all of their monthly repayments when they fall due. The indicative interest rate on the IAL is 9.75%pa.

The 100% IAL is available to investors who choose 90% or 100% capital protection^†.

3. MQ Limited Recourse Loan
The MQ Limited Recourse Loan allows SMSFs to borrow up to 100% of the protected investment amount. SMSF investors should consider carefully their investment strategy and any risk management statement they have, before borrowing.

Investors utilising the MQ Limited Recourse Loan are not required to complete the Application Form in Part B of the MQ Gateway Trust Product Disclosure Statement.

Investors must nominate Interest Rate Plan Number 3 in the MQ Limited Recourse Loan Application Form, and also select the classes and application amount they wish to invest in on the same Application Form.

By selecting Interest Rate Plan Number 3 on the MQ Limited Recourse Loan Application Form, investors will be debited all of their interest payable on their loan amount for the 3.75 year period upfront on 30 June 2008. This means that if you choose to borrow $500,000 you will be debited $143,306.51 on 30 June 2008. After this, you will not be required to make any additional payments throughout the term.

The following example illustrates how to complete the MQ Limited Recourse Loan Application Form depending on the level of Capital Protection selected.

Loan 1: Investor chooses to invest in Class BF – Asian Hindsight with 100% capital protection† and borrowing 100% of the protected amount.

Loan 2: Investor chooses to invest in Class BK – Climate Change with 90% capital protection† and borrowing 100% of the protected amount.

If applying for an MQ Limited Recourse Loan, please indicate in Section 2 of the Loan Application Form that you would like to apply for Interest Rate Plan Number 3.

How to invest
To apply for Units in the June offer of MQ Gateway, please read and understand both Part A and Part B of the Product Disclosure Statement (“PDS”), as well as any relevant loan documents, and consult your adviser.

If you wish to apply for the product directly (ie. without utilising any loan facilities), please complete the Application Form contained in Part B of the PDS, or you may apply online at www.macquarie.com.au/mqgateway.

If you wish to borrow to invest via the Macquarie Structured Product Investment Loan, please complete the Application Form contained in Part B of the PDS, and the Application Form contained in the Macquarie Structured Product Investment Loan document, or you may apply online at www.macquarie.com.au/mqgateway.

If you wish to borrow to invest via the MQ Limited Recourse Loan, you need only complete the Application Form in the MQ Limited Recourse Loan document, or you may apply online at www.macquarie.com.au/mqgateway.

* Subject to eligibility. Taxation outcomes depend on the investor’s circumstances. Investors should seek their own taxation advice before investing.

^† Capital protection is provided to the MQ Gateway Trust (“MQ Gateway”) and not to each individual investor. Capital protection applies only on the Capital Protection Date and is subject to the terms and conditions of the Product Disclosure Statement (“PDS”), and in particular will not apply in the case of an Early Maturity. For full details (including risks), investors should refer to relevant sections of the PDS.

⁺ Interest rates will be finalised prior to the Offer Close Date and confirmed in the confirmation(s) of the loan. 6.95%pa is only available under the MQ Limited Recourse Loan for investments of $500,000 or above. If utilising this loan option, interest for the term of the investment is payable upfront. For example, for a $500,000 investment and loan, interest payable upfront will be $143,306.51.

^# Indicative Participation Rate. Participation Rate ranges differ between classes and are outlined in the PDS available from MQ Portfolio Management Limited ABN 55 092 552 611 (“MPML”). Final Participation Rates will be set on the Unit Issue Date. Exposure is to the floored quarterly averaged growth over the investment term.

^{^} 6.67% of the growth since inception will be locked in each quarter for all strategies. Assumes Units are held until the Capital Protection Date.

º A special note on investment ideas

Except where otherwise indicated, the investment ideas and directional views are summaries based on research by Macquarie Research Equities (“MRE”), a wholly-owned subsidiary of Macquarie Group Limited.

The research was based on market conditions at the time of writing which may change suddenly and without notice. As the future matters described are of a predictive and variable nature, you should not rely on them alone and should discuss them with your adviser before making any investment decision. For example, they may be affected by assumptions that become inaccurate or by known or unknown risks and uncertainties. Reports of the relevant research are available to your adviser from MRE on request.

The investment ideas presented here are general and do not relate to you or the MQ Gateway offer directly. MRE has not been involved in the creation of MQ Gateway and so does not endorse or recommend investing in it.

MRE is rated the no. 1 equities research house in Australia, according to the Top 15 Domestic Institutions and All Investors category in the 2006 Peter Lee Associates survey for Australia.

Macquarie does not give tax advice. How tax laws apply to you depends on your personal circumstances and you should seek your own advice.

This general advice has been prepared by MPML and does not take into account your personal objectives, financial situation or needs. Macquarie recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Units referred to in this document (“Units”) in MQ Gateway issued by MPML will be offered under a PDS available from MPML for a limited time from mid April 2008. All potential investors should obtain Part A and Part B of the PDS from the issuer relating to Units and consider it before making any decision about whether to acquire, or continue to hold, Units.

Other than Macquarie Bank Limited ABN 46 008 583 542 (“MBL”), any Macquarie Group entity noted on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.

Macquarie Group, its employees and officers may have interests in Units by acting in various roles (including as director, investment banker, underwriter or dealer, holder of principal positions, broker, lender or adviser) and may receive fees for so acting. It may effect transactions which are inconsistent with any recommendations in this advice. MBL will receive remuneration and pay commission to introducing advisers as described in the PDS and, for the loan, in the relevant loan brochure.

This information is current as at 29 April 2008 and is subject to change without notice.

100PercentInvesting (through Macquarie) will rebate 100% of the Upfront (0.909%) & Loan (0.909%) commissions.

100PercentInvesting may receive a 0.25% pa trailing commission on both the investment total and loan total. This is paid by the Fund Manager and is NOT an additional charge to the investor.

Simply download an Investment Brochure/PDS above. It’s that easy!


return to previous page