YIELDS

Citigroup’s YIELDS are generally a 6-year financial product that offer a capital protection of 100% if held until maturity. YIELDS have a targeted income of 12% p.a*, paid quarterly, and offer you the potential for capital growth from exposure to a portfolio of 30 of the world’s largest companies (selected from the Dow Jones Global Titan’s 50 Index).

Benefits of YIELDS

YIELDS may benefit long-term investors and Self Managed Super Funds who:

  • seek higher yields than those generally available from cash investments
  • seek capital growth from exposure to international equity markets
  • want the confidence of capital protection on expiry (after 6 years)
  • are looking for the benefits of an ASX listed investment for maximum flexibility

Product overview - YIELDS2

Warrant code YLDSO2
Investment term / expiry date 6 years
Target yield  12% p.a.*
Capital protection Yes, 100% at expiry (subject to early maturity)
Face value /YIELDS $10.00
Distribution quarterly

*The target income is only indicative and is not guaranteed.

The quarterly distribution (coupon) depends on various factors including:

  • the income generated from the ‘Income Plus Trading strategy’ in the form of dividends and premiums received from writing call options over the 30 stocks within the global equity portfolio
  • the respective allocation to each asset within the dynamic portfolio. A greater allocation into the ‘Income Plus Trading Strategy’ will generally result in a greater coupon payment, and vice versa

The price of YIELDS on the secondary market will fluctuate over the period to reflect the performance of the dynamic portfolio as well as accrued, but unpaid coupons.
Hence, investors purchasing the day prior to the coupon date will be entitled to the full coupon due. On the day the coupon is paid, the secondary market price of YIELDS should theoretically fall by the coupon payment. The price of YIELDS will also fluctuate based on general market factors such as interest rates and exchange rates.

What happens at expiry

You will receive a maturity notice approximately 20 days prior to the maturity date. There are two alternatives at maturity,  You can either:

  • take physical delivery of the delivery parcel (see the PDS for details of the delivery parcel), or
  • take a cash settlement

If you do not make a decision, you will automatically receive delivery of the delivery parcel.

Risks

The target coupon of YIELDS depends on the performance and volatility of the ‘Income Plus Trading Strategy’ as well as the successful allocation within the dynamic portfolio.

Other risks are described in the PDS. All investors should consider the PDS carefully before making any investment decision in relation to this product.