Who is Portfolio of Warrants a suitable investment for?

Portfolio of Warrants suit Investors with a moderately positive long-term view on the stock market or managed fund, offering gearing levels up to 55%.

Portfolio of Warrants may be a suitable investment if one or more of the following apply:

An investor who is seeking :
• Leverage the medium or long-term view of the stock market
• Dividend yields.
• Relative capital growth
• Portfolio diversity
• Build long term wealth in a tax effective manner
• Gearing benefits

The types of investors who are suited to Portfolio of Warrants:
• Individuals
• Companies
• Trusts
• Self Managed Superannuation Funds
• Joint investors e.g. with other family members

However, SMSF’s are expected to be most suited to the investment.

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Is there a minimum investment amount?

The minimum investment amount is $30,000.

Quantum may consider investment amounts lower than this on a case by case basis.

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How can a super fund borrow to invest in shares and managed funds?

A super fund can invest in shares and managed funds by investing in a Portfolio of Warrants. Portfolio of Warrants are instalment Warrants. Portfolio of Warrants contains a limited recourse loan to the SMSF to help finance the purchase of the investments.

Typically Warrants are investments issued by banks and other financial institutions over shares and securities and are traded on the Australian Stock Exchange. Self Managed Super Funds have been investing in these products for a number of years. Portfolio of Warrants is not listed on any exchange. You can freely trade underlying Shares or manage funds [subject to the managed funds liquidity].

Quantum invest in shares and managed funds providing investors all the potential benefits of a leveraged share and managed funds investment.

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How Portfolio of Warrants works?

Portfolio of Warrants consists of a:

• Shares and managed funds purchase
• Loan to fund the purchase

• Interest payments for the loan
• Dividend payments

The shares and managed funds are purchased via individual loan and held in trust. Dividend income is used to reduce each individual loan account and may be used to pay interet and fees.

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How are the Shares and managed funds purchased, held and transferred to the Investor?

A Portfolio of Warrants matures after 20 years. The shares and managed funds are held in trust until a completion payment is made. Once a completion payment is made the shares and managed funds (or cash) will transfer to the investor. An investor can pay a Completion Payment at any time to exercise the warrant or make a completion payment at maturity.

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How does the cash flow of Portfolio of Warrants operate?

During the life of a Portfolio of Warrants, dividend payments will be used to reduced each loan. This can be used to pay interest expenses and fees. Interest will be capitalized on each loan, if there is insufficient funds, selected Warrants may be sold to ensure there are sufficient funds available. Interest and fees are payable monthly in arrears.

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How can an investor meet the interest and fee requirements?

A SMSF can meet the servicing requirements of a SMSF in a variety of ways. Including:

• Ensuring there is sufficient loan balance to meet interest and free payment requirements.
• Selecting stocks that produce income.

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Is this a tax effective investment?

Yes. There are potential taxation benefits against:

• Saving for your equity.
• Interest payments
• Loan principal repayments.
• Fees
• Capital gains
• Compared to an investment outside super.

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Is capital gains tax payable on transfer for the security trustee to the investor?

There should not be a capital gains tax event on transfer of the shares and managed funds to the investor/SMSF as the investment have been held in trust for you.

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What happens at Maturity Date?

 Investors have the right to elect to:

1. Exercise the Portfolio of Warrants.
Investors who wish to take delivery of the Shares and managed funds can pay the Completion Payment and obtain legal ownership of the Shares and managed funds. To do this the Investor must send a Completion Notice to Quantum at least 6 weeks before the Maturity Date or such other date as Quantum advises. Quantum shall advise the Investor of the amount payable as the Completion Payment. Unless otherwise agreed by Quantum, this payment must be received by Quantum 2 weeks before the agreed Maturity Date.

2. Do nothing.
Quantum will exercise its security rights. The Shares and managed funds will be sold and the proceeds, net of the Loan, accrued Interest, selling costs and Fees, will be paid to you.

3. Rollover.
This will depend upon the continuation of the product.

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When can and investor exit the investment?

Investors can make a completion payment at any time during the life of the warrant.

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Are there any penalties for early repayment?

No.

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What happens to the shares and managed funds when a completion payment is made?

Once a completion payment is made the shares and managed funds transfers to the investor’s name. The investor can hold the shares and managed funds or sell it when they desire. Quantum is no longer involved once the completion payment is made. Quantum can also sell your investments and forward you cash proceeds.

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Who pays for the costs of buying and selling the shares and managed funds?

Any costs of the underlying shares and managed funds sale or purchase are for the investors care.

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