IDFC Asset Allocation Fund of Funds Aggressive Plan_Key information memorandum
OneHundredBrochure
1. Davy OneHundred Portfolio
100% capital protected global equity portfolio
����� 2010
Davy Private Clients
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J&E Davy, trading as Davy, is regulated by the Financial Regulator. Davy is a member of the Irish Stock
Exchange, the London Stock Exchange and Euronext. Davy is authorised by the Financial Regulator in
Ireland and regulated by the Financial Services Authority for the conduct of business in the UK.
2. Contents
Davy OneHundred Portfolio 3
Indicative Key Terms 4
How do Principal Protected Instruments Work? 7
Advantages and Disadvantages 10
Risk Factors 11
Important Information 12
Appendix 14
Application Form 15
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3. A 100% Principal Protected Investment
The Davy OneHundred Portfolio provides investors with exposure to the performance of equity markets over
a five-year period, with the added reassurance of 100% principal protection at maturity.
At maturity investors will receive:
100% of their invested capital back•
In addition to
95%* of any positive performance of the index basket•
The product is structured as a fixed-term deposit with an institution which has an S&P credit rating of no
lower than A-, or a Moodys credit rating of at least A1 or equivalent for long-term deposits (as at March
2010).
How does this investment operate?
Investors take on exposure to the performance of a basket of indices across major equity markets without
purchasing the indices directly. At maturity, the investor receives 95%* of the portfolio (index basket)
performance in addition to having 100% of their invested capital returned to them. In the event that the
portfolio has fallen or not increased in value, investors will receive 100% of their invested capital back at
maturity.
The Portfolio
The portfolio gives exposure to four broad equity market indices. Chart 1 gives a breakdown of the
weights which will be assigned to each equity market and Table 1 (overleaf) describes the underlying
portfolio indices to which investors have exposure.
Davy OneHundred Portfolio
* The actual level of participation will be determined on the trade date. The 95% participation rate reflects indicative
pricing which may be subject to change prior to trading.
25% FTSE 100 (UKX)
25% Hang Seng (HSI)
25% S&P 500 (SPX)
25% Dow Jones Euro Stoxx 50 (SX5E)
Chart 1. Equity Market Allocation
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Source: Davy Private Clients
4. Table 1. Underlying Portfolio Indices
Equity Index (Price Return) Description
FTSE 100 (Bloomberg UKX Index) The 100 most highly capitalised companies traded on the London Stock Exchange.
Hang Seng (Bloomberg HSI Index) An index composed of a selection of companies from the stock exchange of Hong Kong.
S&P 500 (Bloomberg SPX Index)
An index of 500 US stocks, designed to measure the performance of the broad domestic
economy across all major industries in the US.
DJ Eurostoxx 50 (Bloomberg SX5E Index) An index of 50 European Blue-Chip stocks from the countries within the Eurozone.
Indicative Key Terms
Term 5 years
Denominated Currency Euro (€)
Valuation Updated on a monthly basis
Principal Protection 100% principal protection at maturity.
Principal is protected by the issuing institution and applies at maturity only. The product is
structured as a fixed-term deposit with an institution which has an S&P credit rating of no
lower than A- or a Moodys credit rating for long term deposits of at least A1 or equivalent
(as at March 2010). Investors should note that they bear the credit risk of the issuing
institution. This means that, even where the investment performs well, investors could lose
all or some of their invested principal in the event that the issuing institution defaults or
becomes insolvent.
Charges & Commission
Davy will charge an upfront commission fee of 3% on top of any investment in the
Davy OneHundred Portfolio. Ongoing portfolio management charges will be levied in
accordance with the terms of your service level with Davy. Further information is available
from your Portfolio Manager or at www.davy.ie
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Source: Davy Private Clients
Warning: The value of your investment may go down as well as up. Capital is protected at
maturity only.
5. Final Level: Averaging
The closing level for the Davy OneHundred Portfolio is calculated by taking the average
basket (portfolio) level over the final twelve months of the product (thirteen observations).
For a full explanation of how averaging works please see the Averaging section on Page 8.
Example 1: Assuming the investor invests €100,000 (Total Initial outlay €103,000
including commission). At maturity, the index basket has increased in value by 90.65%,
the investor receives 95% of this positive index basket return in addition to their original
investment or 86.12% gross 62% net after the imposition of DIRT at 28%. (The annual
performance for each index is discussed in the Appendix.)
Table 2. Simulated Returns for the period 31st December 2002 – 31st December 2007
(100% x Invested Capital) + [Invested Capital * 95%* Max [ ∑ (Weighting in each index * (Final Index level - Initial Index Level) -1) , 0 ]]
*The actual level of participation will be determined on the trade date. The 95% participation rate reflects current pricing which may be
subject to change prior to trading.
Index S&P 500 DJ Eurostoxx 50 FTSE 100 Hang Seng
Starting Index Level 879.82 2,386.41 3,940.40 9,321.29
Final Index Level* 1,473.50 4,325.99 6,409.47 23,413.09
Index Return 67.48% 81.28% 62.66% 151.18%
Index Weight 25.00% 25.00% 25.00% 25.00%
Index Basket Performance 90.65%
Participation 95.00%
Gross Return on Index Basket 86.12%
Net Return after Tax (DIRT 28% as of
March 2010)
62.00%
Capital Returned 100.00%
Total Return incl. Initial Investment** 162.00%
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*Averaging in final 12 months over 13 observations
**Before Davy Commission of 3% on top of initial investment amount Source: Davy Private Clients / Bloomberg
Payoff at Maturity
At maturity investors receive 95%* of the positive basket (portfolio) performance in addition
to 100% of their original invested capital back. In the event that the portfolio has fallen or not
increased in value investors will receive 100% of their invested capital only back at maturity.
The product performance is calculated as:
DAVYONEHUNDREDPORTFOLIO
Warning: These examples use simulated returns and are estimates used for illustrative
purposes only. They are not a reliable guide to the future performance of this investment.
6. Example 2: Assuming the investor invests €100,000 (Total Initial outlay €103,000
including commission). At maturity, the index basket has fallen in value by -19.79% and the
investor receives their initial capital of 100% back. (The annual performance for each index is
discussed in the appendix.)
Table 3. Simulated Returns for the period 31st December 1998 – 31st December 2002
Access
Liquidity: It is the current intention to provide liquidity to investors in the Davy OneHundred
Portfolio. However, investors should note that this will be on a best efforts basis only and no
guarantee of liquidity can be provided.
Investors must also note that the investment, if exited early, will be encashed at the market
value of the investment at the time of encashment which may be significantly less than the
principal invested. (See the Disadvantages of Principal Protected Investments section on page
9). Your principal protection does not apply if the investment is encashed prior to maturity.
Tax
Irish residents are subject to DIRT* tax on gains (at a rate of 28% as at March 2010). Returns
may be paid gross to non-residents, companies, charities and pension funds under certain
circumstances and subject to completion of the appropriate Revenue declaration forms.
Warning: If you cash in your investment before the maturity date you may lose some or all of
the money you put in.
* Averaging is final 12 months over 13 observations
**Before Davy Commission of 3% on top of initial investment amount Source: Davy Private Clients / Bloomberg
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*DIRT: Deposit Interest Retention Tax
DAVYONEHUNDREDPORTFOLIO
Index S&P 500 DJ Eurostoxx 50 FTSE 100 Hang Seng
Starting Index Level 1,229.23 3,342.32 5,882.60 10,048.58
Final Index Level* 961.15 2,409.58 4,022.96 10,267.41
Index Return -21.81% -27.91% -31.61% 2.18%
Index Weight 25.00% 25.00% 25.00% 25.00%
Index Basket Performance -19.79%
Participation 95.00%
Gross Return on Index Basket 0.00%
Tax Payable (DIRT 28% as of Dec 2009) 0.00%
Capital Returned 100.00%
Total Return incl. Initial Investment** 100.00%
7. How do Principal Protected Investments work?
Principal protected investments aim to offer exposure to an underlying asset class such as
equities while ensuring that at maturity investors receive all or part of their initial principal
back. In their simplest form, principal protected investments are comprised of two component
parts, a fixed income instrument such as a bank deposit or note and an option.
A Fixed Income Instrument - the fixed income instrument provides the principal protection at
maturity.
An Option - the option gives the investor exposure to the underlying market by giving them
the right to buy or sell an underlying asset at a specific price at a point in the future.
Participation
The extent of participation within a principal protected investment determines the degree to
which investors benefit from increases in the value of the underlying market. Investors can
engage in varying levels of participation across a broad spectrum. The level is dependent on
a number of factors including term, the underlying degree of principal protection and the
underlying market in which the investment is invested.
This document has assumed participation levels of 95% for illustration purposes only. Final
participation levels will be determined on the trade date. They may be greater than 95%
which means that investors will receive more than 95% of any basket performance (subject to
averaging). Conversely, a participation level of less than 95% will mean that investors will get
less than 95% of the performance of the basket (subject to averaging).
Averaging
Many principal protected investments make use of averaging during the last months of the
investment’s term. Averaging takes the index level at predetermined points on a particular
date each month (if this date is not a business day, the next available business day is used) in
the period prior to maturity and takes the average to determine the final level.
Warning: The information contained herein is provided for Irish resident investors
only and is based on our understanding of Irish tax legislation and the known
current Revenue interpretation thereof. This can vary according to individual
circumstances and is subject to change without notice including retrospectively.
It is intended as a guide only and is not a substitute for professional advice. The
above information is not applicable to UK resident clients. You should consult
your tax advisor for the rules that apply in your individual circumstances.
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8. Table 4. Averaging: Example of averaging over a 12 month period, over 13 observations
using the FTSE 100 Index between 31st December 2001 and 31st December 2002
Averaging is designed to give a degree of protection against the negative movements which
may occur in a volatile market.
Taking the average of the basket return in the period prior to maturity may safeguard
investors against any sharp losses in the run-up to maturity. Conversely, if there is a significant
increase in the value in the run-up to maturity, the return would be lower than would
otherwise be the case, due to averaging.
Advantages and Disadvantages
Advantages of Principal Protected Investments
Principal protected investments have several advantages which make them an attractive
option for many investors looking for access to a range of asset classes and investments
whilst preserving security.
Principal protected investments are flexible and can offer different terms and
different levels of principal protection.
8
Date Basket Level
31st December 2001 5217.4
31st January 2002 5164.8
28th February 2002 5101.0
29th March 2002 5271.8
30th April 2002 5165.6
31st May 2002 5085.1
28th June 2002 4656.4
31st July 2002 4246.2
30th August 2002 4227.3
30th September 2002 3721.8
31st October 2002 4039.7
29th November 2002 4169.4
31st December 2002 3940.4
Average 4615.92
Source: Bloomberg / Davy
Warning: This example uses simulated returns which are estimates used for illustrative
purposes only. They are not a reliable guide to the future performance of this investment.
DAVYONEHUNDREDPORTFOLIO
9. Risk Factors
No Assurance of Investment Return
There is no guarantee that the indices in which the Davy OneHundred Portfolio invests will
achieve results comparable to those achieved in the past, or that targeted performance will
be met.
Warning: Simulated or past performance is not a reliable guide to future performance.
In addition to the Disadvantages of Principal Protected Investments section, the following
section lists some additional risk factors that prospective investors should consider.
You should consult an advisor about the risks that apply in your individual circumstances.
9
Principal protected investments can offer the opportunity to invest in a wide
range of asset classes including, but not limited to, equities, commodities, bonds,
and property.
Principal protected investments offer an attractive risk-return profile. Investors
receive a high degree of the upside of a basket with the reassurance of principal
protection at maturity.*
Disadvantages of Principal Protected Investments
Like all investments, principal protected investments can have some disadvantages:
The return on the investment is subject to the return of the underlying basket,
which may not perform over the period.
Investors in principal protected investments are not entitled to the income from
the underlying assets.
In order to ensure the return of the initial principal invested, investors must hold
the investment until it matures. While liquidity is often available prior to maturity,
investors may not receive back their initial principal as principal is protected by
maturity only.
At maturity, the value of the investment is determined solely by the performance
of the underlying basket. However, during the life of the investment the valuation
will not be solely determined by the value of the underlying basket. Due to its
indirect exposure to an option, the valuation will also be determined by additional
factors, including but not limited to volatility and interest rates.
DAVYONEHUNDREDPORTFOLIO
* In the event that an investor unwinds their investment early, principal is not protected and they may realise a loss depending
on the investment’s market value at that point in time.
10. Currency Risk
Sterling (GBP) based investors should note that this is a Euro-denominated investment and
that changes in the GBP / Euro exchange rate will affect their returns in GBP terms.
Credit Risk
This product is structured as a fixed-term deposit. Principal is protected by an issuing
institution and applies at maturity only. The issuing institution will have an S&P credit rating
of no lower than A- or a Moodys credit rating for long-term deposits of at least A1 or
equivalent (as at March 2010). Investors should note that they bear the credit risk of the
issuing institution. This means that even where the investment performs well, investors could
lose all or some of their invested principal in the event that the issuing institution becomes
insolvent.
Inflation Risk
Inflation risk is the erosion of value in real terms that occurs during a general increase in
prices and corresponding fall in the purchasing power of money during inflationary times.
Inflation will impact on the real return of the Davy OneHundred Portfolio.
Liquidity Risk
Liquidity risk is the risk that an asset cannot be traded because there is no market for it at an
acceptable price. Liquidity risk becomes particularly important to parties who are about to
hold or currently hold an asset, since it affects their ability to trade. Investors must note that
the investment, if exited early, will be encashed at the market value of the investment at the
time of encashment, which may be less than the market value of the underlying basket due
to indirect exposure to an option. Your principal protection does not apply if the investment
is encashed prior to maturity.
Davy has the discretion to refuse redemption requests depending on the liquidity terms of
the underlying indices. Investors should be prepared to bear the risks of holding the 100%
Davy Protected Portfolio for the entire investment period of five years.
Valuation
The valuation of principal protected investments in the period prior to maturity is not subject
solely to the underlying basket return. A number of factors including but not limited to
volatility and interest rates also affect valuation in the period prior to maturity. For these
reasons the valuation realisable on early exit will be subject to the impact of these factors at
that point in time and may be higher or lower than that of the underlying basket return.
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11. Tax Risk
The information contained herein is provided for Irish resident investors only and is
based on our understanding of Irish tax legislation and the known current Revenue
interpretation thereof. This can vary according to individual circumstances and is
subject to change without notice, including retrospectively. It is intended as a guide
only and not a substitute for professional advice. The above information is not
applicable to UK resident clients. You should consult your tax advisor for the rules
that apply in your individual circumstances.
Indicative Terms
Investors should note that the current terms of the Davy OneHundred Portfolio are indicative
only and may be subject to change. While 95% participation has been assumed in the
indicative terms, it is not possible to finalise the participation level until the trade date, as it
is dependent on a number of factors including, but not limited to, interest rates and market
volatility. If the participation amount exceeds this, investors will receive a proportionately
greater share of the performance of the basket. Conversely, a participation of less than
95% will mean that investors will receive a lesser share of the performance. Final terms
and conditions will be determined on the trade date with clients being made aware of any
material changes prior to trading. Other changes will be advised within two business days.
Where to next?
If you are interested in investing in the Davy OneHundred Portfolio, please
contact your Davy Portfolio Manager on (01) 679 7788 or the Private Client
Telephone Share Dealing Service on (01) 614 9000.
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12. Important Information
This document has been issued by Davy and is provided on a confidential basis, to and for
use solely by those parties who have expressed an interest the Davy OneHundred Portfolio
(the “investment”), for the purpose of providing certain information about the investment.
The information contained herein does not purport to be comprehensive. It is strictly for
information and discussion purposes only.
The information contained in this document is not investment research or a research
recommendation for the purposes of regulations. The document does not constitute an offer
for the purchase or sale of any financial instruments, trading strategy, product or service. No
one receiving this document should treat any of its contents as constituting advice. It does not
take into account the knowledge and experience, investment objectives or financial situation
of any particular person. On receipt of this document, we would ask that you contact your
Portfolio Manager. Dependent on the legal structure of your account, your current investment
objectives and your cash flow needs, it will be important that you consider taxation, legal and/
or any other implications that may arise as a result of any decision made in this regard. Certain
transactions, including those involving futures and options, give rise to substantial risk and
are not suitable for all investors. Accordingly, clients should consider whether the certificates
described herein are suitable for their particular circumstances. Interested parties are not
entitled to rely on any information or opinions contained in this document or the fact of its
distribution for the purpose of making any investment decision or entering into any contract or
agreement with Davy in relation to the investment. On the realisation of any investment in the
investment, there is no guarantee that investors will receive back the original amount invested
or anything at all.
This document contains summary information regarding the investment. Statements,
expected performance and other assumptions contained in this document, are based on
current expectations, estimates, projections, opinions and/or beliefs of Davy at the time of
publishing. These assumptions and statements may or may not prove to be correct. Some of
the information contained in this document has been obtained from published sources or has
been prepared by third parties. While such sources are believed to be reliable, Davy shall have
no liability, contingent or otherwise, to the user or to third parties, for the quality, accuracy,
timeliness, continued availability or completeness of same, or for any special, indirect,
incidental or consequential damages which may be experienced because of the use of the data
or statements made available herein. As a general matter, information set forth herein has not
been updated through the date hereof and is subject to change without notice.
While reasonable care has been taken by Davy in the preparation of this document, no
warranty or representation, express or implied, is or will be provided by Davy or any of its
shareholders, subsidiaries or affiliated entities or any person, firm or body corporate under its
control or under common control or by any of their respective directors, officers, employees,
agents, advisers and representatives, all of whom expressly disclaim any and all liability for the
contents of, or omissions from this document, the information or opinions on which it is based
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13. and/or whether it is a reasonable summary of the investment and for any other written or oral
communication transmitted or made available to the recipient or any of its officers, employees,
agents or representatives.
Neither Davy nor any of its shareholders, subsidiaries, affiliated entities or any person, form or
body corporate under its control or under common control or their respective directors, officers,
agents, employees, advisors, representatives or any associated entities (each an “Indemnified
Party”) will be responsible or liable for any costs, losses or expenses incurred by investors in
connection with the investment. The investor indemnifies and holds harmless Davy and each
Indemnified Party for any losses, liabilities or claims, joint or several, howsoever arising, except
upon such Indemnified Party’s bad faith or gross negligence. With the exception of liabilities
arising from fraud or wilful neglect, any liability, where it exists, for any losses, damages, costs
and expenses, including legal fees, howsoever incurred, shall not exceed four times the value
of any commissions, charges and fees paid on the investment. Davy and each Indemnified Party
shall have no liability or obligation for any direct or indirect consequential loss after the first
anniversary following investment.
This document has been made available on the express understanding that any written or
oral information contained herein or otherwise made available will be kept strictly confidential
and is only directed to the parties to whom it is addressed. This brochure must not be copied,
reproduced, distributed or passed to others at any time without the prior written consent of
Davy.
J&E Davy, trading as Davy is regulated by the Financial Regulator. Davy is a member of the Irish
Stock Exchange, the London Stock Exchange and Euronext. Davy is authorised by the Irish
Financial Regulator and regulated by the Financial Services Authority for the conduct of business
in the UK.
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15. I/We hereby irrevocably instruct and authorise you to make the following investment in the Davy OneHundred Portfolio (the
‘investment’) on my/our behalf:
Amount to be invested €
Davy OneHundred Portfolio
Davy Private Clients
Please complete this document and return signed to: Your Davy Portfolio Manager, Private Client Department, Davy,
Davy House, 49 Dawson Street, Dublin 2.
Application Form
In consideration of Davy making the investment available to me/us, I/we unconditionally and irrevocably confirm, agree and
acknowledge the following:
I/We have sufficient monies available to make payment of the investment amount and represent that I/we are making the investment on my/our
own behalf and represent that I/we am/are not making this investment on behalf of some other person or with a view to re-sale. Furthermore I /We
understand and accept that this is a five year investment which must be held until maturity in order for your principal protection to apply. Liquidity is on
a best efforts only basis and cannot be guaranteed. Investors should therefore be willing to hold the investment for its entire term. In the event that the
investment is exited early the unwind proceeds will reflect the market value at that point in time and may be less than the principal protected amount.
As recommended by Davy, I/we have received, read, fully understood and accepted the contents of the Information Memorandum (paying particular
attention to the Risk Factors and the advantages and disadvantages section) and agree to be bound by the contents, as if they were incorporated herein.
I/We understand and accept that this purchase instruction is subject to the applicable Terms & Conditions of Davy, including the Davy Conflicts of
Interest Policy and Order Execution Policy, copies of which are available from Davy on request or which can be viewed at www.davy.ie. Furthermore, I/we
understand that a number of potential or actual conflicts may arise as detailed in the Terms & Conditions and Conflicts of Interest Policy.
I/We confirm that Davy has advised me/us to make our own independent commercial assessment of the instruction detailed in this form and obtain
advice based on my/our own individual circumstances from my/our own tax, financial, legal and other advisers before making an investment decision,
and to only make such decisions on the basis of our own objectives, experience and resources.
I/We acknowledge that throughout the term of the investment, the investment and all documentation relating thereto shall be legally held by Davy
or a related person, firm or body corporate on my/our behalf as beneficial owner and I/we shall not call for a transfer of the legal interest therein without
the prior written agreement of Davy.
I/We understand that neither Davy, the issuing institution nor any of its shareholders, subsidiaries, affiliated entities or any person, form or body
corporate under its control or under common control or their respective directors, officers, agents, employees, advisers, representatives or any
associated entities (each an “Indemnified Party”) will be responsible or liable for any costs, losses or expenses incurred by an Indemnified party in
connection with the investment(s). I/We indemnify and hold harmless Davy, the issuing bank and each Indemnified Party for any losses,
liabilities or claims, joint or several, howsoever arising, except upon such Indemnified Party’s bad faith or gross negligence. I/We understand that with the
exception of liabilities arising from fraud or wilful neglect, any liability, where it exists, for any losses, damages, costs and expenses, including legal fees,
howsoever incurred, shall not exceed four times the value of any commissions, charges or fees paid on the Investment. Davy and each Indemnified Party
shall have no liability or obligation for any direct or indirect consequential loss after the first anniversary following the redemption of the investment.
DETACH
17. Davy Private Clients
Davy OneHundred Portfolio
Key Features Document April 2010
HOW DOES THE DAVY ONEHUNDRED PORTFOLIO TRACKER BOND
WORK?
• This product is provided by Davy, Davy House, 49 Dawson Street, Dublin
2, under an agreement with an issuing institution which has an S&P credit
rating of no lower than A- or a Moodys credit rating for long term
deposits of at least A1 or equivalent (as of April 2010). The issuing
institution will not be known until the trade date. Davy will advise
investors of the issuing institution within two days of the trade date.
• The Tracker is a 5 year investment that promises to return at least 100%
of the initial investment amount, after a 3% commission charge. The
product may deliver both 100% of the initial investment and 95% of the
positive performance of a basket of equity indices, if held to maturity.
• There is no promised bonus payment on this investment. The return of
100% of the original invested amount at maturity will represent a return
of -0.6% per annum on your total investment including commission.
• Averaging will apply in the last twelve months of the life of the
investment. Averaging takes the index level over 13 observations at
predetermined points on particular dates and takes the average of those
levels to determine the final level. Averaging during this period may
safeguard the investor against sharp losses in a falling market, but
conversely may disadvantage the investor, where markets are rising.
• The exposure to the basket of indices will be gained by the issuing
institution who will purchase an option. Dividends will not be accrued and
as such there will be no entitlement to income. The tracker is suitable only
as a capital growth investment.
• The issuing institution does not receive any dividend or interest income
arising from the investment used to secure the cash bonus.
• This is a Euro-denominated investment and non-Euro investors should
note that changes in their base (local) currency exchange rate relative to
the Euro will affect their returns in local currency terms.
• This investment is intended to mature 5 years from the launch date .
Payment will take place within fivebusiness days of the maturity date.
WHERE DOES MY INVESTMENT GO?
DO I HAVE ACCESS TO MY INVESTMENT?
This is a five-year investment. Investors should be prepared to bear the
risks of holding the Tracker for the entire investment period. While it is
currently the intention to provide liquidity to investors, this will be on a
best efforts basis only and no guarantee of liquidity can be provided.
Investors should be aware that the investment, if exited early, will be
encashed at the market value of the investment at the time of
encashment, which may be less than the market value of the underlying
basket due to the indirect exposure to an option. Your principal
protection does not apply and you may suffer a financial loss if the
investment is encashed in whole or in part, prior to maturity. Davy has
discretion to refuse redemption requests.
WHAT HAPPENS IF I DIE BEFORE THE TRACKER BOND MATURES?
Where the investor dies in advance of the maturity of this investment, this
investment may run to maturity, whereupon capital will be repaid to the
estate of the deceased, subject to receipt of appropriate legal
documentation, including probate.
The investment may be encashed upon death, however this will be treated
as an early encashment and the same terms apply as set out in the
previous section, Do I have access to my investment? Principal
protection does not apply and your investment may suffer a financial loss.
The benefits payable will depend on the liquidity of the underlying
investments and market conditions at the time of death. As such, Davy
cannot provide any assurances in this regard.
The benefit will be payable to the estate of the deceased as soon as
possible after the appropriate legal documentation, including probate has
been received and the portion of the option that is owned by the investor
is unwound in the market.
Investors should be aware that it may take a significant period of time to
redeem investment proceeds in these circumstances.
WHAT ABOUT TAX?
Irish residents are subject to Deposit Interest Retention Tax (DIRT) on gains
(at a rate of 28% as of April 2010), which will be deducted by the issuing
institution at maturity from benefits payable. Returns may be paid gross
to non-residents, companies, charities and pension funds, under certain
circumstances and subject to completion of the appropriate Revenue
Declarations Forms.
A proposed investment of €100,000 (€103,000 including fees of
3% on the €100,000 invested) will be used at the date of
investment, as follows:
€100,000 or 100% will be used to secure the promised
payment of €100,000 or 100% payable after 5 years. This is
equivalent to a promised return on this part of your Investment
of 0%, before tax is deducted.*
€0 or 0% will be used to secure the cash bonus which may be
payable after 5 years.
€3000 or 3% of the invested amount, will be taken in
charges.
€ 103,000 Total
If the bonus payment is zero, the promised payment of 100% of
the original invested amount of €100,000 will represent a return of
-0.6% per annum, on your total investment (including commission)
over the period to the date of the promised payment, before any tax
is deducted.
* This means that 100% of your investment will be used to fund the Capital
Secured Amount. The variable amount is provided from the payout of a
financial derivative purchased by the issuing institution using the interest
earned on the deposit.
Investors are obliged to ensure that they comply with their
own revenue reporting requirements. The information
contained herein is provided for Irish resident investors only
and is based on our understanding of Irish tax legislation and
the known current Revenue interpretation thereof. It can vary
according to individual circumstances and is subject to change
without notice including retrospectively. It is intended as a
guide only and is not a substitute for professional advice. You
should consult your tax advisor for the rules that apply in your
individual circumstances. This is not applicable to UK resident
clients, who should also seek independent professional advice.
