How are iPartners Investors making money on Telstra?

iPartners STAR Series (By iPartners, 8th August 2018)



A number of our investors are asking how we are making money through exposure to the TLS share price?

If you had purchased TLS shares on the same date as purchasing units in iPartners STAR Series 1 you would be down @18% on your TLS shares compared to up @5% on iPartners STAR Series 1 units.

The answer on How, is very simple, with iPartners STAR Series 1 investors have no exposure to losses on TLS or the equity basket unless one or more of the shares falls greater than 30%.

Series 1 also benefits from a fixed return of 10% that is paid regardless of the performance of the equity basket, effectively putting a buffer under expected losses.

In General terms STAR Series will typically

  • underperform in rising equity markets as you would likely have been better off old school buying the equities. (maximum return on STAR series is the fixed return)
  • outperform in flat markets as the fixed return is typically greater than expected dividend yield.
  • outperform in mildly falling markets, as noted above investors do not have exposure to the equities unless one or more of the reference shares falls greater than 30%.
  • outperform in market falls >30% due to the fixed return buffer (may underperform due to share specific event as compared to a portfolio)

It is far from an apples vs apples comparison, its probably not even apples vs oranges, and before investing you would want to dig into the details of the Investment, although highlights through private markets you can source investments with a different risk/return profile than the traditional approach.

In this case if you were considering buying TLS shares you would have been better off buying STAR Series 1 to get your TLS exposure.

The STAR Series 1 reference basket was exposed to TLS / QBE / WFD / BXB / WPL shares

For more information please get in touch with the team at service@ipartners.com.au