More about the RMB Note
Structured notes are a very niche way of investing. The bank issues a note to investors in return for investment capital, which is invested in a selection of strategic underlying investment instruments. The structuring and management of these portfolios is the responsibility of the portfolio manager (Fairtree). It can consist of a single or diversified blend of instruments such as CIS, Direct Equities, Alternatives, Index Trackers etc. Traditional and alternative asset classes can be combined to create unique risk-return investment portfolios. The client’s risk tolerance, objectives and investment horizon determine the criteria for asset blending and structuring.
Structured notes have been developed primarily for longer-term growth objectives and therefore investors should at least have a three-year investment horizon when investing. Liquidity is limited to a 2 calendar months’ notice period. Because the bank is housing the assets, the investor benefits from the favourable tax benefits – Capital Gains Tax (CGT) is only payable on redemption of the investment (note) and banks are exempt from Dividend Withholding Tax (DWT). The rebalancing of building blocks within the structured note, therefore, does not qualify as a CGT event. The structure is flexible and can easily be rebalanced to provide for possible changes to the investor’s investment objectives and circumstances.
The product is subject to a minimum initial investment of R 250 000 and a minimum ad-hoc tranche of R 100 000 per fund or portfolio solution. These products also offer the following optional rider benefits, subject to the pre-approval of the bank’s credit committee: (Capital guarantees, optional borrowing and optional leveraging.)
