1 CREATE WEALTH WITH SHARES
2 Commonwealth Securities Limited ABN AFSL ( CommSec ) Locked Bag 22, Australia Square NSW 1215 Important Information. This brochure has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason any individual should, before acting on the information, consider the appropriateness of it having regard to their own objectives, needs, financial and taxation situation and, if necessary, seek appropriate independent financial and taxation advice. You should obtain a Product Disclosure Statement (PDS) relating to any financial product and consider the PDS before making any decision to invest. Commonwealth Direct Investment Account (CDIA) is a product of the Commonwealth Bank of Australia, marketed by CommSec. CommSec Margin Lending is a product of the Commonwealth of Australia, administered by CommSec. CommSec Margin Lending full terms and conditions are in the CommSec Margin Loan booklet. Applications are subject to credit approval. Commonwealth Securities Limited ABN AFSL (CommSec) is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN AFSL and a Participant of the ASX Group and Chi-X Australia. If you have a complaint, our dispute resolution process can be accessed by calling
3 CONTENTS 1 EASY SHARE TRADING Everything for the everyday investor The benefits of being a share investor GETTING STARTED IS EASY Choose how you invest AUSTRALIAN SHARES CASE STUDY TOP 10 TOOLS Affordable rates Secure online trading Help when you need it MAKE BETTER INVESTMENT DECISIONS Free research tools COMMSEC SHARE PACKS SERIOUS TOOLS FOR SERIOUS INVESTORS INTEGRATE YOUR CASH AND INVESTING Your CommSec share trading account + cash account What's a Commonwealth Direct Investment Account (CDIA)? More about the CDIA INVESTMENT AND SUPER FUNDS Think big, start small A world of choice Find the fund that s right for you Lower fees, so you have more to invest TIME TO GET STARTED
4 1 CREATE WEALTH WITH SHARES EASY SHARE TRADING Today, more Australians are investing in shares than ever before*, and it s not hard to see why. Over time, the sharemarket has offered better long-term returns than most other investments. Unlike property, you don t need a large deposit to get started. And, because you don t have to pay the stamp duty or legal fees associated with property purchase, your transaction costs are lower, so you can put more of your money to work. EVERYTHING FOR THE EVERYDAY INVESTOR CommSec is all about helping you to do it yourself. We provide the tools and support every investor needs to build and manage a successful portfolio. While we don t give advice, you can use our research tools and information to choose potential investments. Then, when you re ready to invest, our affordable share trading service puts the market at your fingertips. And after you ve started investing, our portfolio management tools make it easy to keep track of your investments THE BENEFITS OF BEING A SHARE INVESTOR Better returns Easy access Start small Lower costs Income or growth Although past performance is no indication of future performance, over the long term Australian shares have historically performed better than most other investments. And thanks to dividend imputation, they compared even better after tax.* You can usually sell some or all of your shareholdings and access your money within a few days. You don t need a lot of money to become a share investor. You can start a portfolio with an initial investment of as little as $500. With shares, you can put more of your money to work, instead of spending it on estate agents fees and stamp duty (as you would with property investments). Whether you re looking for a regular income or long-term growth, there are likely to be shares to suit you. * Source: Russell/ASX Long-Term Investing Report December 2010
5 CREATE WEALTH WITH SHARES 2 GETTING STARTED IS EASY CommSec makes it easy to get started in shares, no matter what your level of investment experience is. It s free to become a CommSec client, and you can start trading with a minimum investment of $500. Whether you re investing $500 or $500,000, CommSec offers you outstanding brokerage rates and real cost savings, no matter how you trade. CHOOSE HOW YOU INVEST When it comes to investing, time matters. That s why we give you four different ways to place orders, track your portfolio and follow the market, 24 hours a day. Wherever you are or whatever you re doing, you can stay in touch. Online at commsec.com.au Over the phone With Phone Trader With CommSecIRESS Place orders, monitor your portfolio and use our online research, all while taking advantage of our low internet brokerage rates. If you re new to investing, or you simply prefer to speak to a real person, call between 8am and 7pm (Sydney time), Monday to Friday. Phone Trader is an intuitive self-service phone trading system you can use to place trades, obtain quotes, listen to your watchlist and review your orders and portfolio. Phone Trader gives you 24-hour, 7 days a week access, so you can manage your trading when it suits you. Simply call and follow the prompts. CommSecIRESS is an online trading platform that gives you access to dynamic, real-time market data and pricing updates. For more information on CommSecIRESS, visit comsec.com.au
6 3 CREATE WEALTH WITH SHARES AUSTRALIAN SHARES CASE STUDY HOW AN INVESTOR TURNED $25,000 INTO OVER $38,000 IN 10 YEARS 1. The strategy 2. How he did it 3. The result Andrew knew that to build wealth over the long term, he needed to do more than simply put money aside. Having saved $25,000, he was ready to invest, but knew that an investment property was out of the question. So Andrew decided to invest in Australian shares. In January 2001, Andrew invested his $25,000 in a range of shares in the Australian market to build wealth over the long term. Based on the performance of the All Ordinaries Index over the period, January 2001 to December 2010, Andrew s portfolio value could potentially be worth $38,537, representing a profit of $13,537 or over 54%. $60,000 Andrew's Portfolio $50,000 Portfolio Value $40,000 $30,000 $20,000 Investment $10,000 $ JAN 01 JAN 02 JAN 03 JAN 04 JAN 05 JAN 06 JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 Important information. This example is for illustrative purposes only. Changes in the index level reflect changes in the total market capitalization of the index that are caused by price movements in the market. All dividends have been excluded. Tax and brokerage have not been taken into account. This does not represent a recommendation from CommSec to buy, sell or hold any stock. Past performance is not indicative of future performance. The information on this site has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regards to their own objectives, needs, financial and taxation situation, and, if necessary, seek appropriate independent financial and taxation advice.
7 CREATE WEALTH WITH SHARES 4 TOP 10 TOOLS 1. Affordable online trading If you are CHESS sponsored by CommSec and you settle your trades through a Commonwealth Direct Investment Account (CDIA), you can trade online at our low Internet Preferred brokerage rate, starting at just $19.95.* 2. CommSec Share Packs Buy your own Australian share portfolio in minutes with ready-made Share Packs in four investment styles and save on brokerage. 3. Company floats/ipo s As a CommSec client, you can invest in company floats and other new investment opportunities. 4. Investment and super funds Diversify your portfolio and save on entry and contribution fees, by investing in a managed investment fund, super fund or allocated pension through CommSec Direct Managed Funds. 5. Margin Lending Expand your portfolio by borrowing to invest with a CommSec Margin Loan. 6. Conditional Trading One of the secrets of successful investing is to develop a trading strategy and stick to it. CommSec Conditional Trading helps you keep your strategy locked in, even when your eye is off the market. 7. ASX CFD s and OTC CFD s Contracts for Difference (CFDs) are a versatile and powerful investment tool for experienced investors. 8. CommSecIRESS CommSecIRESS is an online trading platform that gives you access to dynamic, real-time market data and pricing updates, so you can trade like a professional. 9. International Trading Trade on more than 30 international sharemarkets with CommSec s International Securities Trading service, including key sharemarkets from the US, Japan and the UK. 10. Exchange Traded Options Options give experienced investors the opportunity to profit when their view of the market proves correct, even when it is trading down or sideways. * Brokerage for Internet Preferred trades up to $10,000. TIP To take advantage of our low Internet Preferred brokerage, open and settle trades through a Commonwealth Direct Investment Account (CDIA) and be CHESS sponsored by CommSec.
8 5 CREATE WEALTH WITH SHARES AFFORDABLE RATES Type of trade Trade value Cost Internet Preferred share trade* Up to $10,000 $19.95 $10, $25,000 $29.95 More than $25, % Internet share trade Up to $10,000 $29.95 More than $10, % Share trade using Phone Trader Up to $10,000 $29.95 More than $10, % Share trade over the phone Up to $10,000 $59.95 $10, $25, % $25, $1m 0.49% More than $1m 0.11% * To trade at Internet Preferred rates, you need to trade online, be CHESS sponsored by CommSec, and settle your trades through a Commonwealth Direct Investment Account (CDIA) or a CommSec or Colonial Margin Loan. SECURE ONLINE TRADING Trading online with CommSec is fast, easy and safe. Our straight-through processing system means that you can log on and have your order on the market in moments. Your information is protected by 128-bit Secure Sockets Layer (SSL) encryption, the same level of encryption used by banks and other secure sites. HELP WHEN YOU NEED IT Just because you choose to do it yourself doesn t mean that you re on your own. We re here to help you every step of the way. Between 8am and 7pm (Sydney time), Monday to Friday, our friendly Client Service Officers are ready to answer your questions and help you through the investment process, step by step. You can access our web site 24 hours a day to research the market, monitor your portfolio, and place orders. You can also use our automated telephone system, Phone Trader, to check prices and place orders at any hour of the day or night.
9 CREATE WEALTH WITH SHARES 6 MAKE BETTER INVESTMENT DECISIONS Not so long ago, only full-time professional investors had access to live share prices and company data. But now every investor can have the same information as the professionals, plus online investment tools to help you sort through the clutter and find the information you need. Our quick start tour contains important information that will save you time and help you to start investing sooner. You ll discover just how easy it is to buy or sell shares, research the market online, and track your portfolio. So while we don t offer advice, CommSec provides the tools and information you need to make better investment decisions. FREE RESEARCH TOOLS Watchlists Quotes and Research Charting Economic and market news Track your portfolio, favourite stocks or potential investments. View detailed profiles of all ASX-listed stocks, including key financial data, earnings forecasts and consensus analyst recommendations. Read ASX announcements seconds after they re released to the market. CommSec charting allows you to analyse stock performance and time your trades, with a range of features and technical indicators. Read the latest on the economy and the market, with daily and weekly reports, plus analysis.
10 7 CREATE WEALTH WITH SHARES COMMSEC SHARE PACKS With more than 2000 securities listed on the Australian Securities Exchange (ASX), deciding what to buy can be a real challenge. But with a CommSec Share Pack, you can buy your own Australian share portfolio in minutes, and save on brokerage too. Each Share Pack contains a diversified portfolio of six leading blue-chip companies, chosen by Commonwealth Bank s Private Client Services Investment Research team. And you don t need lots of money to start. CommSec Share Packs start from just $4,000, and brokerage starts from just $66 per pack*. Choose a pack to match your goals. Which Pack? Market Leaders Pack Capital Growth Pack Income Pack Tax-Effective Income Pack Six of Australia s best-known blue chip companies. Six leading companies with strong potential for solid share price growth. Six leading companies with a leaning towards high dividends. Six leading companies with a leaning towards solid, highly franked dividends. Benefits Invest in a portfolio of names you know and trust. Long term share price growth. Strong dividend income. Dividend income with franking credits. To find out which shares are currently included in each pack, join CommSec and login to commsec.com.au or call * For share pack purchase online. Share sales are subject to our usual brokerage. You should consider whether the Share Pack is appropriate for your own circumstances before making any decisions to invest. No warranty or guarantee is given by Commonwealth Bank of Australia and its subsidiaries for the repayment of capital invested or the returns or payment of income or interest in respect to any of the shares in a Share Pack. Share Packs can only be ordered during market hours. TIP If you re thinking of starting a portfolio for your children or grandchildren, a CommSec Share Pack may be a cost-effective way to do it. Your tax adviser can help you make sure you put your investments in the right name.
11 CREATE WEALTH WITH SHARES 8 YOUR SECURITY IS OUR RESPONSIBILITY With Australia s largest online broker, you can be confident that your security is a priority. To protect your valuable personal information and financial details, CommSec continues to invest in the latest security, including: Two-factor and SMS authentication Transaction fraud monitoring 128-bit encryption MasterCard Zero Liability** For more information on a CDIA visit commsec.com.au COMMSEC CHESS SPONSORSHIP CHESS (Clearing House Electronic Subregister System) is the computer system used by the Australian Securities Exchange (ASX) to record shareholdings and manage the settlement of share transactions. When you apply for a CommSec trading account you will automatically be CHESS sponsored by CommSec. This means you authorise us to create a CHESS Participant Sponsored Holding in your name and trade on it as you instruct. Being CHESS sponsored by CommSec means you can buy and sell shares more quickly than if your shares were 'issuer sponsored', and to buy shares without providing a deposit if you have sufficient holdings. Being CHESS sponsored by CommSec allows you to automatically track portfolio and market values using the online Portfolio Summary tool. When you settle your shares through a CDIA, you can enjoy our Internet Preferred brokerage rates. You can find out more about the CHESS sponsorship agreement by reading the CommSec terms and conditions. If you have any questions, please call between 8am and 7pm (Sydney time), Monday to Friday. ** MasterCard s Zero Liability Policy does not apply to commercial cards or PIN-based transactions. Other restrictions apply. For full details, please visit mastercard.com.au
12 9 CREATE WEALTH WITH SHARES SERIOUS TOOLS FOR SERIOUS INVESTORS At CommSec, we have built our reputation on affordable share trading and access to managed investment funds but that s not all we do. When you re ready to take the next step, we can help you manage your portfolio and discover new opportunities for profit, with some of the most powerful investment tools on the market. Alerts Conditional Trading Keep track of your favourite securities by SMS or , wherever you happen to be. Choose from Price Alerts, which tell you instantly when a security reaches your selected trigger price, or Time Alerts, which give you an update on your list of securities at selected times of the day. You can now also choose Announcement Alerts, which triggers an SMS or if your selected company made an ASX announcement. Lock in your investment strategy by asking us to place an order for you when conditions are right. You simply tell us which share you want to buy or sell, plus your target price, and we watch the market for you. International share trading Invest on over 30 key global markets, including the New York, Hong Kong and London Stock Exchanges. Margin lending Floats/IPO's Multiply your investment opportunities by borrowing to invest with a CommSec Margin Loan. When you borrow to invest, you can buy more shares or investment funds than you would be able to simply using your own cash. Take part in new issues of shares, investment funds, property trusts and hybrid securities, often not available to the general public. Research new opportunities, download a prospectus and in some cases, apply online. Warrants and options Discover new profit-making opportunities by trading warrants and options. Options and warrants give you the opportunity to profit when your view of the market proves correct even when it s trading downwards or sideways. CommSec- IRESS CFD's CommSecIRESS, is an online trading platform that allows you to respond instantly to market movements. Offering real-time, dynamic market data streams and the ability to receive quotes on equities and derivatives. CommSecIRESS is the ideal tool for the active trader. Best of all, if you re an active trader you could qualify for free access to CommSecIRESS. For more information on CommSecIRESS, visit comsec.com.au Contracts for Difference (CFD's) are a versatile and powerful investment tool for experienced investors. Fees and charges apply for these products and services. For more information, visit commsec.com.au or call
13 CREATE WEALTH WITH SHARES 10 INTEGRATE YOUR CASH MANAGEMENT AND INVESTING YOUR COMMSEC SHARE TRADING ACCOUNT + CASH ACCOUNT The Commonwealth Direct Investment Account (CDIA) linked to your trading account combines the expertise of CommSec and the Commonwealth Bank of Australia (CBA) to bring you an account that s exclusive to holders of CommSec share trading accounts. It works with your CommSec share trading account so that all your cash needs trading, saving and transacting are covered in one place. We ve also created a single sign-on function, so that when you log on to either CommSec or NetBank you can seamlessly switch between the two sites, accessing both your Trading and CDIA. It s simple; all you need to do is use the tabs in the top left corner of your screen. WHAT S A COMMONWEALTH DIRECT INVESTMENT ACCOUNT (CDIA)? The CDIA is a cash management account specifically designed for CommSec share traders, allowing you to trade, save and transact, when and where it suits you. That s why we say it s always on. Always on means your money is always ready to work for you, however you want it to, such as: Seamless settlement of trades, so you can take advantage of investment opportunities as they arise, without having to transfer funds between accounts Low brokerage from just $19.95 per trade when you settle to your CDIA Competitive interest on your money when between investments Transact real-time on your cash account through NetBank, CBA s leading online banking platform A full range of transaction functions and at-call access to your cash, plus an optional CBA Debit MasterCard
14 11 CREATE WEALTH WITH SHARES MORE ABOUT THE CDIA As well as being a settlement Account for your CommSec Share Trading Account, the CDIA is a fully featured cash management hub which gives you access to your account anywhere, anytime. Why choose a CDIA? Interest on your CDIA is calculated daily and paid monthly* No monthly account keeping fees Unlimited electronic transactions and two assisted withdrawals free each month One account for all your transactions so you don t need to move funds between multiple cash accounts Access via Australia s largest branch network and telephone banking Access to CBA s online banking platform, NetBank, for complete visibility of your transactions instantly and with 24 hour access to make Bpay and Electronic fund transactions An optional CBA Debit MasterCard offers instant access to your cash via Australia s largest bank ATM network and is accepted at over 32 million MasterCard locations worldwide Optional Access to a chequebook facility Kaching and Commbank apps are at your disposal for your Android, ipad and iphone devices. For further information on the CDIA, visit commsec.com.au * To trade at Internet Preferred rates, you need to trade online, be CHESS sponsored by CommSec, and settle your trades through a Commonwealth Direct Investment Account or a CommSec or Colonial Margin Loan.
15 CREATE WEALTH WITH SHARES 12 INVESTMENT AND SUPER FUNDS Another way to invest in shares is via a Managed Fund. The main benefits of an Australian or International share fund are that professionals do the stock-picking for you and the funds usually diversify across a number of shares rather than just one or two. Investment and superannuation funds are an easy, cost-effective way to invest in shares, commercial property, bonds, cash, or a mixture of these and other assets. They can be an outstanding investment option if you: Want to build an investment using a regular savings plan Prefer to leave the day-to-day investment decisions to a professional Are looking for a new super fund Want to access markets that may be difficult to get information about when investing directly Want to diversify a small investment amount across a number of shares and/or asset classes Are a self managed super fund investor wanting to diversify THINK BIG, START SMALL You can start small, with an initial investment of only $1,000, and build up your investment with regular contributions of as little as $100 a month. Even a small regular investment can add up to a surprisingly large portfolio over time. And, because your investments are managed by a team of professional managers, you don t have to be an expert yourself. A WORLD OF CHOICE With over 1000 investment and super funds from more than 60 leading Australian fund managers, you can choose from multi-sector funds, with investments spread across different asset classes, and specialist funds concentrating on anything from International and emerging markets to Australian small companies.
16 13 CREATE WEALTH WITH SHARES FIND THE FUND THAT S RIGHT FOR YOU Our free online research tools help you compare funds, monitor fund performance and find the fund that most closely matches your personal investment objectives. Funds in Less Than Five Minutes Fund Finders Fund Profiles Decide if you re a defensive, conservative, moderate, growth or aggressive investor and then view a list of matching funds. A quick and easy way to search for investment and Super Funds, using fund manager, fund categories and Morningstar ratings View detailed profiles of potential fund investments, including each fund s risk profile, asset allocation, performance history and fees LOWER FEES, SO YOU HAVE MORE TO INVEST Best of all, when you invest through CommSec Direct Funds, we rebate up to 100% of fund contribution fees. With many funds charging an upfront fee of around 4% every time you invest.
17 CREATE WEALTH WITH SHARES 14 I CAN DO THAT 1. The strategy 2. How she did it 3. The result Nick and Julia have a beautiful four week old baby daughter, Samantha. They would like her to attend a private high school when she turns eleven and estimate her school fees will be around $14,000 a year 1 for six years or around $84, That seems like a lot of money, but by starting early and sticking to a regular savings plan they realise this is very achievable. They start by putting $5,000 into an Australian Share fund, add $300 a month and reinvest their distribution. This means they benefit from compound returns earning further investment returns on their re-investments. Because Nick and Julia are investing for the longterm, they also decide to invest in funds with higher levels of risk for greater potential returns. If their managed fund were to grow by 7% a year 2 and allowing for inflation of 2.5% a year, by the time Samantha starts private school in eleven years time they will have around $58, In addition, their savings plan will continue after Samantha starts high school, adding another 6 years of savings. The information on this page has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regards to the individual s objectives, financial situation and needs, and, if necessary, seek appropriate professional advice. 1 In today s dollars. 2 Before fees and taxes. Please remember fees and taxes have an impact on long-term returns. 3 No allowance has been made for taxation, including capital gains tax on investment earnings. Note: This example is for illustration purposes only and does not represent actual or expected returns for any managed fund. A change to one or more of the variables and assumptions listed will produce different results. TIP You can build an investment fund portfolio even faster using a CommSec Margin Loan with Regular Gearing. Call to find out more.
18 15 CREATE WEALTH WITH SHARES TIME TO GET STARTED To register as a CommSec client and start investing: Contact us on to have the form sent in the mail; or Visit commsec.com.au and register online It s as simple as that. There s no cash upfront required on orders of leading stocks up to $25,000 (or $7,500 for non-leading stocks), and you can pay for your trades through your existing bank, building society or credit union account. Or, if you prefer to take advantage of our low Internet Preferred brokerage rates, you can open a Commonwealth Direct Investment Account and be CHESS sponsored by CommSec.
19 WE RE HERE TO HELP To find out more, call us on , 8am to 7pm (Sydney time), Monday to Friday, or visit our web site at commsec.com.au CREATE WEALTH WITH SHARES 16
20 commsec.com.au CSC MKTG220