Commodities
Series 22

Summary of the key features

Sequoia Commodities Series 22 tracks the performance of the BNP Paribas Strategy C52 10% Index (“Index”).  The objective of this Index is to provide a long only, diversified exposure to the commodity asset class, excluding Agriculture and Livestock, with a targeted volatility of 10%.

Diversification

The Index provides diversification across 3 commodity sectors and Natural Gas;

• Industrial Metals Sector;
• Precious Metals Sector;
• Energy Sector; and
• Natural Gas,

including exposure across 14 individual commodities and cash:

1. Copper;
2. Zinc;
3. Aluminium;
4. Nickel;
5. Lead;
6. Gold;
7. Silver;
8. WTI Crude Oil;
9. Brent Crude Oil;
10. Gasoline;
11. Low Sulphur Gas Oil;
12. ULS Diesel;
13. Natural Gas; and
14. Cash.

The Index provides the above exposures via futures contracts linked to the relevant underlying commodities, rather than any form of direct exposure to the relevant underlying commodity. Please see below for more information on the commodity futures.

Downloads

To find out more, and to download a copy of the Term Sheet PDS and Master PDS, please click on the links below

Key Dates

Key risks include:

• Risk of 100% loss in relation to the Total Investment Cost and Upfront Adviser Fee. The Total Investment Cost equals the Prepaid Interest in relation to the Loan and the Application Fee. Investors may also incur an Upfront Adviser Fee in addition. A 100% loss will occur if there is no Performance Coupon paid at Maturity. This will be the case if the Index Performance is zero or negative at Maturity;
• Risk of partial loss (i.e. less than 100% loss) in relation to the Total Investment Cost and Upfront Adviser Fee. The Total Investment Cost equals the Prepaid Interest in relation to the Loan and the Application Fee. Investors may also incur an Upfront Adviser Fee in addition. Investors may incur a partial loss if the Performance Coupon received at Maturity is less than the Break-Even Point;
• Timing risks. The timing risk associated with Series 22 is significant. This is because the Investment Term is fixed and the Index Performance adjusted for changes in the AUD/USD exchange rate (i.e. Series Performance) needs to exceed the Break-Even Point by the time the Maturity Date arrives in order for the investor to generate a profit from their investment (ignoring any Upfront Adviser Fee and any external costs). If this does not occur by the Maturity Date then Investors will generate a loss;
• The potential Performance Coupon is determined by reference to the Index Performance as well as changes in the AUD/USD exchange rate. An increase in the AUD/USD exchange rate between the Commencement Date and the Maturity Date will reduce the potential Performance Coupon whilst a decrease in the AUD/USD rate between the relevant dates will lead to an increase in the potential Performance Coupon. As such, whether or not you break-even depends on both the Index Performance and the AUD/USD exchange rate performance during the Investment Term;
• Volatility and exposure risk – the volatility control mechanism used by the Index means that if there is high volatility in commodities markets during the Investment Term there is a risk the Index will have little to no exposure to commodities during some or all of the Investment Term, which may provide some protection against decreases in the prices of commodities comprising the Index however it may also limit the Index’s (and the Unit’s) exposure to increases in the prices of commodities comprising the Index. To the extent the Index has an exposure primarily to cash as a result of the volatility control mechanism, the Index will be unlikely to have Index Performance greater than the Break-Even Point;
• There is no guarantee that the Units will generate returns in excess of the Prepaid Interest and Fees, during the Investment Term;
• Additionally, in the event of an Investor requested Issuer Buy-Back or Early Maturity Event, you will not receive a refund of your Prepaid Interest or Fees. The amount received will depend on the market value of the Units which will be determined by many factors before the Maturity Date including prevailing interest rates in Australia and internationally, foreign exchange rates, the remaining time to Maturity, and general market risks and movements including the volatility of the Index. Investors should be aware the Units are designed to be held to Maturity and are not designed to be held as a trading instrument;
• Gains (and losses) may be magnified by the use of a 100% Loan. However, note that the Loan is a limited recourse Loan, so you can never lose more than your Prepaid Interest Amount and Fees paid at Commencement.
• Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty; and
• The Units may mature early following an Early Maturity Event, including an Adjustment Event, Market Disruption Event or if the Issuer accepts your request for an Issuer Buy-Back.
• Please refer to Section 2 “Risks” of the Master PDS for more information.

Units in Sequoia Commodities Series 22 are issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936) (the “Issuer”) and arranged by Sequoia Asset Management Pty Ltd (ACN 135 907 550, AFSL 341506) (the “Arranger”). Investments in the Sequoia Commodities Series 22 can only be made by completing an Application Form attached to the Term Sheet PDS, after reading the Term Sheet PDS dated 19 January 2024, the Master PDS dated 17 August 2017 and Target Market Determination (for retail investors) and submitting it to Sequoia. A copy of the Termsheet PDS, Master PDS and Target Market Determination can be obtained by contacting Sequoia Asset Management on or contacting your financial adviser. You should consider the Term Sheet & Master PDS’s as well as the Target Market Determination before deciding whether to invest in Units in Sequoia Commodities Series 22. Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS.