Launch
Series 63

Dynamic Multi-Asset Momentum Index

The name of the Index is the NXS Momentum Cross-Asset VT (“MOXA”) Index.  It is a quantitative, rules based, long-only investment strategy that targets consistent returns throughout market cycles by dynamically rebalancing a diversified multi-asset portfolio based on recent performance trends. There is no short selling involved within the index.

• Diversification: The MOXA Index allows investors to get a diversified exposure across 3 asset classes and 3 different geographical regions. This reduces the risk that the Index is overly exposed to a specific market. There are 12 component indices in total:

• Momentum and Monthly rebalancing: The MOXA Index seeks to derive returns from assets with a positive price trend. The performance of the MOXA Index is driven by the 6 components that have the best recent performance within the universe rebalanced on a monthly basis. Recent performance is measured by the average of the previous 60-Business Days performance and the previous 120-Business Days performance, provided that at least 1 component index per asset class is selected.
• Risk Management: The MOXA Index uses a 2-step risk management mechanism:
  • Firstly, on a monthly basis, the portfolio risk is divided equally across the 6 best performers. It uses a technique called Equal Risk Contribution (ERC), which targets a portfolio with a maximum volatility of 5% and a maximum leverage of 200%. The ERC principle is that each component has the same contribution to the portfolio risk;
  • Secondly, on a daily basis, as an additional protection and in order to limit negative performance in extreme market conditions, a risk control mechanism is used. It ensures that the volatility will remain close to the 5% target by temporarily reducing the exposure in situations where the volatility of the ERC portfolio exceeds 6%.

Summary of the key features

Downloads

To find out more, and to download a copy of the Term sheet PDS, Target Market Determination and Master PDS, please click on the links below:

Key risks include:

• Your return (including any Performance Coupon) is affected by the performance of the Index. There is no guarantee that the Index will perform well.
• 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 63 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;
• 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.

For more information, please contact Sequoia at: invest@sequoia.com.au and 02 8114 2222.

Units in Sequoia Launch Series 63 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 Launch Series 63 can only be made by completing an Application Form attached to the Term Sheet PDS, after reading the Term Sheet PDS dated 18 February 2022 and the Master PDS dated 14 August 2017 and submitting it to Sequoia A copy of the PDS can be obtained by contacting Sequoia Asset Management on or contacting your financial adviser. You should consider the Term Sheet & Master PDS’ before deciding whether to invest in Units in Sequoia Launch Series 63.  Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS.