ANZ ETFS PHYSICAL US DOLLAR ETF. (ASX Code: ZUSD)

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1 ANZ ETFS PHYSICAL US DOLLAR ETF (ASX Code: ZUSD)

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3 INVESTMENT BUILDING BLOCKS FOR A CHANGING WORLD Introducing a suite of innovative exchange traded funds (ETFs) designed for Australian investors by ANZ ETFS, a unique collaboration between one of Australia s leading banks and a specialist global provider of exchange traded products. Geared toward investors who seek building blocks for a diverse portfolio, these new ETFs are a cost effective, reliable and transparent way to access investment opportunities that are normally hard to reach, including global equities, commodities and FX investments. Reliable and transparent Traded on the Australian Securities Exchange (ASX), ETFs are registered managed investment schemes which are regulated by the Australian Securities and Investments Commission (ASIC). And because they are publicly listed, investors have access to live intra-day pricing, transparent performance and daily net asset values (NAV) of each ETF. With real-time valuations of their holding, investors can enter or exit the funds at any time throughout the trading day at a known price. 1

4 THE EXCHANGE TRADED FUND WITH REAL CURRENCY WHAT IS ANZ ETFS PHYSICAL US DOLLAR ETF? The ANZ ETFS Physical US Dollar ETF (ASX code: ZUSD) provides investors with exposure to the performance of the US dollar against the Australian dollar. ZUSD invests in bank deposits denominated in US dollars, with any interest earned distributed to investors*. It can be traded by investors on the ASX just like a share, and is settled and held in normal brokerage accounts. No units can be issued until the USD is delivered to the deposit bank. AT A GLANCE ZUSD Benchmark Management Fee 0.45% Exposure ANZ ETFS Physical US Dollar ETF USD/AUD Exchange Rate US Dollar * There is no guarantee that any interest will be earned or distributed to investors. KEY BENEFITS Pure US dollar exposure With ZUSD, investors get exposure to the performance of the US dollar against the Australian dollar and key macro-economic themes in the US. Diversification tool Currency exposures allow investors to diversify their portfolios. Liquidity The liquidity of its underlying assets determines an ETF s liquidity. As ZUSD invests US dollars, the most liquid currency in the world, it is expected to trade with strong liquidity. Cost-effective At 0.45% per annum, ZUSD is a cost-effective way to access the market compared with foreign currency accounts that often include fees for transactions. Security The ETF holds US dollars in a bank deposit with ANZ. Easy to access Like shares, ZUSD is traded on the ASX throughout the day using normal brokerage accounts, and there is no need to open a foreign exchange (FX) account to access US dollars. No minimum investment requirement Unlike currency accounts with banks and trading platforms, you can invest in any amount from one ETF unit. Maximum loss capped Margin calls do not apply to an ETF, and the most an investor can lose is the total value of their investment. Transparent The FX rate, interest rate, costs and valuation are publicly available. 2

5 THE ADVANTAGES OF A CURRENCY ETF Currency ETFs are a simple, low-cost way to access foreign currency compared with other options. Simplicity Costs Currency ETF FX Deposit FX Futures/Options Yes All currency ETFs can be traded like a share in normal brokerage accounts Low Management Fees, Commissions No Each currency requires a new account and conversion is subject to the provider s requirements High High spreads, Account fees No Requires margin management and risk monitoring Low Commissions Margin Call No No Yes For futures and sellers of options Minimum Investment No 1 ETF unit (When traded on an exchange) Yes Varies with banks, typically A$10,000 Yes Initial margin for futures and sellers of options Maximum Loss The initial invested amount The initial invested amount May lose more than the initial invested amount SMSF eligible Yes Yes Potentially Approval is subject to many restrictions RISK FACTORS An investment in the units involves a significant degree of risk. The following are just some of the risk factors which should be carefully considered by prospective investors before deciding whether to invest in the Units. Specific risks relating to the Fund are set out in the relevant Product Disclosure Statement. Past performance is not an indication of future performance and the investment performance of the Units could be volatile. Factors affecting the performance of the US dollar may adversely affect the value of Units including market risk, volatility, government policy and intervention, or interest rate risk. In recent years, rates of exchange between currencies have become more volatile and this volatility may continue in the future. An investment in the US dollar via ZUSD will expose investors to risks inherent in holding the exposure via an ETF. These include, among others: Market Risk ETFs aim to replicate the price movements of their underlying benchmark or asset so their performance is dependent on the performance of the underlying currency. Tax As with the majority of investments, ETFs will normally incur some form of taxation. Each investor should obtain independent tax advice. Costs All ETFs incur costs, whether internal costs (related to the product) or external costs (incurred in trading the product). Liquidity Risk Although the Units will be quoted on the ASX there is no guarantee that there will be a liquid market for the Units. Furthermore, in certain circumstances the ASX may suspend trading of the Units or delist a Fund. There are also certain circumstances where the Responsible Entity may limit, reject, scale, or delay redemptions. 3

6 HELPING YOU HEDGE Reflecting Australia s status as a major global commodity producer and exporter, the Australian dollar has historically been highly correlated with commodity price movements. With most commodity prices being denominated in US dollar, commodity prices have historically moved inversely to the US dollar, because a rising US dollar makes commodities more expensive for foreign investors. As a result, Australian investors can seek to offset the threat of declining commodity prices on their underlying holdings of resources companies by taking US dollar exposure. In this way, taking a long US dollar position can provide a partial hedge of an underlying portfolio of commodity equities and commodities. Historical Performance vs Commodities Bloomberg All Commodities AUD/USD 0 0 DEC 07 DEC 08 DEC 09 DEC 10 DEC 11 DEC 12 DEC 13 DEC 14 Bloomberg All Commodities AUD/USD Source: Bloomberg Historical Performance vs Commodity Equities 35, S&P/ASX 300 Resources 30,000 25,000 20,000 15,000 10,000 5, AUD/USD 0 0 DEC 07 DEC 08 DEC 09 DEC 10 DEC 11 DEC 12 DEC 13 DEC 14 S&P/ASX 300 Resources AUD/USD Source: Bloomberg 4

7 DISCLAIMER This document is communicated by ANZ ETFS Management (AUS) Limited ( ANZ ETFS ) (Australian Financial Services Licence Number ). This document may not be reproduced, distributed or published by any recipient for any purpose. Under no circumstances is this document to be used or considered as an offer to sell, or a solicitation of an offer to buy, any securities, investments or other financial instruments and any investments should only be made on the basis of the relevant product disclosure statement which should be considered by any potential investor including any risks identified therein. This document does not take into account your personal needs and financial circumstances. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Although we use reasonable efforts to obtain reliable, comprehensive information, we make no representation and give no warranty that it is accurate or complete. Investments in any product issued by ANZ ETFS are not deposits with, or liabilities of, Australia and New Zealand Banking Group Limited ( ANZ ) or any member of the ANZ Group and are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Neither ANZ, ANZ ETFS, ETF Securities Limited nor any other member of the ANZ Group or ETF Securities Group guarantees the performance of any products issued by ANZ ETFS or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and investor may lose some or all of their investment. Past performance is not an indication of future performance. 5

8 TALK TO US TODAY ABOUT DIVERSIFYING YOUR PORTFOLIO To request more information about our products or research: Visit Call info@anzetfs.com Address 5/242 Pitt Street, Sydney NSW 2000 ANZETFS05 ANZ ETFS Management (AUS) Limited ACN /