Instreet Investment has launched its latest product, the Instreet Link 74, which aims to provide investors with exposure to potential upside of Oil.
Australian investors can now access the gain from rising oil price with a known risk outcome for a one off upfront payment.
“Retail investors and SMSFs can now seek exposure to Oil at a fraction of cost,” says George Lucas, managing director Instreet Investment.
“This product is ideal for investors who are looking for an investment with a defined outcome, on both the upside and downside,” he said.
“The recent sell-off in oil price is due to global crude oil oversupply. While markets are oversupplied, much of the sell-off is more speculative in nature.
“The good news is that oil demand from refineries is already growing at the fastest pace in a decade and Oil production is forecast to rise slower than demand. The future for oil may not be as bleak as it currently seems,” he said.
Technicals, positioning and fund flows have driven much of the oil prices since late 2014.
“Supply from Iran in first half of 2016 may keep the market oversupplied and defer any need to incentivise US production until 2017. However oil supply is always susceptible to geo-political shocks which we have recently seen in Syria. Also there is growing evidence that the fall in Oil prices has prompted the supply cuts needed for a sustained recovery.”
An investment in the Instreet Link Series 74 Units is an investment in a Deferred Purchase Agreement linked to the performance of oil.
As an example, if the price of oil is greater than current levels in 3 years’ time, an investor into this product could make 88% on the investment.
This means that if $10,000 is invested now, an investor could receive $18,800 should the oil price be higher than today’s price in 3 years’ time.
It only needs to be up $0.01 and the investment will provide a 88% fixed return.
If however the price of oil is below current levels in 3 years’ time, this investment will be lost.
As with all commodity investments, it doesn’t pay any income distributions throughout the investment term.”
Investment in the fund closes on 1 November 2015.
