CommoditiesSeries 13

The Bloomberg Commodity Index

The Bloomberg Commodity Index (“BCOM” or the “Index”) is designed to be a highly liquid and diversified benchmark for commodity investments. BCOM provides broad-based exposure to commodities and no single commodity or sector dominates the Index.

As at the date of this Term Sheet IM, the Index is made up of 23 exchange-traded futures on physical commodities, representing 5 commodity sectors and 21 commodities which are weighted to account for economic significance and market liquidity. The weighting restrictions on individual commodities and commodity groups aim to promote diversification.

The Index is calculated on an excess return basis and reflects commodity futures price movements. The index rebalances annually weighted 2/3 by trading volume and 1/3 by world production and weight-caps are applied at the commodity, sector and group level for diversification. Roll period typically occurs from 6th-10th business day based on the roll schedule.

Weighting

Commodity weightings are based on production and liquidity, subject to weighting restrictions applied annually such that no related group of commodities constitutes more than 33% of the index and no single commodity constitutes more than 15%. Between rebalancings, weightings may fluctuate to levels outside these limits.

Sector Allocation

Summary of the key features

Downloads

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

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 13 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 IM for more information.

Units in Sequoia Commodities – Series 13 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 13 can only be made by completing an Application Form attached to the Term Sheet IM, after reading the Term Sheet IM dated 9 November 2022 and the Master IM dated 11 April 2019. A copy of the Termsheet IM and Master IM can be obtained by contacting Sequoia Asset Management on or contacting your financial adviser. You should consider the Term Sheet & Master IM’s as well as the Target Market Determination before deciding whether to invest in Units in Sequoia Commodities – Series 13. Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master IM.