Retail Structured Solutions

In a challenging investment landscape, having a diversified and balanced portfolio which includes a blend of cash, fixed income and equity could assist in improving risk-weighted returns.

Investors constantly seek investments offering the highest possible return, with the lowest possible risk. Consequently, Structured Notes have become an excellent investment option to increase returns and decrease risk and have therefore grown in popularity in recent years. These products are typically issued in the form of a debt instrument, issued by an investment bank, designed to provide investors with a unique combination of attractive returns over a pre-defined period, with the payoff (return) being linked to the performance of an underlying reference asset.

Structured Notes reference equities, equity indices, or multi-asset indices while managing the investment risk through full or conditional capital protection with the issuing bank acting as the guarantor. Payoff profiles vary from conditional income or coupons, to notes that offer capital appreciation or participation. These varied payoff profiles and the deep pool of possible reference assets mean that Structured Notes can help investors match their individual investment preferences, allowing investors or their advisors the ability to tailor solutions for the achievement of financial goals.

Structured Notes can provide a range of benefits for investors looking to build a balanced portfolio with an enhanced risk-return profile, paving the road to financial prosperity. These products can offer attractive returns, downside protection, customisation and diversification opportunities. However, it is crucial to note that Structured Notes are complex financial instruments that require a thorough understanding of risk and reward. All Structured Notes have a specified maturity date or term. Investors should consider the maturity of the offering based on their own view of the markets, their anticipated future income, their liquidity needs and the creditworthiness of the issuer of the product. As such, investors are advised to work with a financial advisor with experience in these products to help investors make informed decisions.

RMB in conjunction with FNB and other distribution partners issue Structured Notes, based on client requirements and market expectations. The Structured Notes are typically Participation Notes that may offer capital protection or not and reference onshore or offshore listed underlyings, listed stocks or listed segments.

The Structured Notes are issued as Senior Unsecured Unsubordinated Debt by FirstRand Bank Limited.

Advantages and benefits of Structured Notes:

Investors are provided with exposure to upside potential on developed equity markets, while minimising downside risk with capital protected or partially capital protected structures.

Structured Notes can provide investors access to leading global companies and sectors over the investment term,  without the costs and complexity of investing directly offshore.

Returns on the reference assets are multiplied by a participation factor, providing investors with overall growth exceeding the index performance.

Structured Notes can complement domestic portfolios and provide global diversification given the concentrated nature of the South African market.

Structured Notes can provide additional rand hedge benefits.

Risks:

The Structured Notes strategy may be exposed to global equities. Should global equities underperform, there is an opportunity cost attached to the capital invested.

Rand volatility could adversely impact performance.

Potential investors should review the risks relating to the Structured Notes which are available at

https://www.firstrand.co.za/investors/debt-investor-centre/prospectuses-and-programme-memoranda/

Subject to tax regulations prevailing at the end of the relevant terms, the product return will be paid gross to the investor. The investor is responsible for determining their liability for tax on the returns from the Structured Note. RMB is not a tax advisor and does not provide any tax advice. Tax legislation is subject to change and tax treatment will depend on the circumstances of the taxpayer. Investors should consult their own professional financial, tax and legal advisers where necessary, before deciding to invest. 

Nothing is to be construed as guidance, a proposal or a recommendation or advice to enter into, or to refrain from entering into any transaction, or as part of any offer to buy or sell any financial instrument, or otherwise.

FirstRand Bank Limited is an Authorised Financial Services Provider (FSP 664).  FirstRand Bank Limited is authorised and regulated by the Prudential Authority.

To view the listing documentation, click here.

*Unwind Level quoted in ZAc per note

Disclaimer:

The Unwind Level provided is indicative and provided for informational purposes only and do not constitute either a bid to unwind or repurchase or an offer to buy or sell any Structured Product, exchange traded fund or exchange traded note (“financial instrument”). The actual unwind price may differ from the indicative unwind price provided below and may be less favourable to you, depending on market conditions and volumes.

FirstRand Bank Limited (“FirstRand”) does not assume liability for any losses arising from errors or omissions in the indicative unwind level, irrespective of whether there has been any negligence by FirstRand, its affiliates or any officers or employees of FirstRand and whether such losses be direct or consequential.  Nothing contained herein is to be construed as guidance, a proposal or a recommendation or advice to enter into, or to refrain from entering into any transaction for the purchase or sale or redemption of any financial instrument, or as part of any offer to buy or sell any financial instrument, or otherwise.