Building a blue chip share portfolio just got easier.

Westpac BlueChip20

Westpac BlueChip20 – accumulate shares in Australia’s top 20 companiesDo you want to invest regularly in the share market, but find yourself put off by the high entry costs and not knowing what shares to buy? A solution is Westpac BlueChip20.

With Westpac BlueChip20 you can own a portfolio of shares in Australian blue chip companies. You invest on a monthly basis, without paying high brokerage and the minimum cash you need to start is only $2,500. You are the beneficial owner of the shares and you won’t need to worry about balancing your portfolio or managing the share trading, it’s all done for you. You can set it up quickly and easily and over time your investment in these shares will grow.

So how does Westpac BlueChip20 work?You can start small (or big if you like)

You start with an initial investment of a minimum of $2,500 and BT Securities Limited lend you the same amount using your blue chip shares as collateral (a margin loan). Your total funds are then invested in shares in the top 20 blue chip Australian companies such as BHP, Westpac, the Commonwealth Bank, Telstra, Woolworths, etc (subject to maintaining the minimum 2% cash balance).

Build it up a month at a time

Each month after that, you add a minimum of $250 from your bank account and match this amount with funds from your margin loan. Your monthly savings amount (instalment contribution) will be debited directly from your nominated bank account on the 15th of each month. The total of each month’s deposit and loan goes to buy more shares building a blue chip share portfolio month on month (subject to maintaining the minimum 2% cash balance).

It’s much like a regular savings and investment plan, only it’s geared. You effectively double the amount you can invest and we call it regular gearing.

Why Westpac BlueChip20?Westpac BlueChip20 has a number of advantages over standard savings and share investing.

We do the work for you

Through Westpac BlueChip20’s regular gearing you can make consistent investments in blue chip companies with monthly contributions. The direct debit from your nominated bank account occurs regularly on the same date each month and your investment occurs without you having to lift a finger.

The investment has a cash balance of approximately 2% of your total investment. Interest is paid on the balance of your cash account.

Save on brokerage costs

Normally when you buy shares you have to pay a brokerage Fee. If you buy lots of small packages of shares in different companies you pay brokerage on each transaction. With brokerage Fees starting at around $20, buying just 1 share in each of the top 20 Australian companies will cost you about $400 in brokerage alone.

Westpac BlueChip20 charges a maximum brokerage Fee on any contribution of just 0.05% (+GST). For example, if you invest $2,500 as your initial contribution and match it with a loan of $2,500, the brokerage cost would be $2.50 (+GST). Then if you invest in $250 each month and match it with a loan of $250, the brokerage would be 25 cents (+GST). This is far more cost-effective brokerage compared to individual trades.

24/7 access

Westpac BlueChip20 gives you online access to your portfolio details that are updated daily at the close of trading. Simply by logging in to westpac.com.au/bluechip20 you can check the performance of your portfolio, your loan balance, dividend payments, cash and trading activity at anytime.

Tax featuresYou don’t inherit other investors’ capital gains

Unlike most other managed investment schemes, your tax position as a result of investing in the Westpac BlueChip20 is affected only by the activity within your own BlueChip20 holding. You do not buy into gains that have built up from other investors’ earlier investments, and you do not realise gains as a result of other investors’ decisions to withdraw from the Westpac BlueChip20.

Interest on your Loan

Interest and other Fees and expenses relating to your investment in Westpac BlueChip20 may be tax deductible depending on your circumstances.

Dividends

Many of the top 20 companies pay shareholders partially or fully franked dividends, which yield imputation credits that may be used to offset other tax liabilities.

The taxation consequences described above are general statements only. They’re not meant as tax advice, so you should speak with a tax adviser to be clear on how investing in Westpac BlueChip20 may affect your tax position.

Paperwork has never been easier

Westpac BlueChip20 also takes care of a lot of the tax-related paperwork that comes with owning shares because it automatically adjusts the tax cost base of your shares with each trade and pays all dividends into your cash account. You can produce complete and concise records online at any time, quickly and easily.

Dividends can cover costs

If you choose to gear your investment at a ratio of 50% (dollar-for-dollar) you get twice the amount of dividends (and franking credits if applicable) that you would normally receive without gearing. These dividends could cover the majority of the borrowing costs (interest) on the loan.

Westpac BlueChip20 at a glance Minimum initial cash contribution $2,500

Minimum initial loan contribution $2,500

Minimum monthly cash contribution via direct debit

$250

Minimum monthly loan contribution $250

Interest rates Visit bt.com.au/marginlending for interest rates

Administration Fee Up to 0.48% (inc. GST) p.a. for a share portfolio up to $500,000

Investment Fee 0.05% p.a. (inc. GST)

Managed Fund Trading Fee For managed fund trading, a transaction charge of $27.50 will be split across all Accounts trading in a managed fund on that day. If your Account is the only Account trading a managed fund that day your maximum charge would be $27.50

Adviser service Fee Up to 1.1% p.a. (inc. GST) or alternatively a fixed dollar amount p.a.

Direct Client service Fee* Up to 0.825% p.a. (inc. GST)

In-Specie Transfer Fee $29.00 (inc. GST) per stock line transferred out. Nil for transfers in.

Settlement Fee $0.33 (inc. GST) per stock line traded on an account in addition to any brokerage allocated

Establishment Fee^ $0 for individuals, $200 for companies and company trusts

The Fees are calculated monthly in arrears based on the daily value of your account and do not include the margin loan interest charges. Please refer to the relevant disclosure documents for full details of applicable Fees.

* Only charged if your account is established without a referral from a financial adviser.

^ The Establishment Fee is only applied to the margin loan component.

Is Westpac BlueChip20 right for you?If you’re new to the share market and want to get a foot in the door, or are looking to increase the diversity in your investment portfolio with shares in the top 20 Australian companies, Westpac BlueChip20 may be an ideal investment vehicle for you.

Borrowing to invest

Westpac BlueChip20 is a geared investment using an associated margin loan facility. A margin lending facility allows you to borrow money to invest in shares and managed funds. Your investment portfolio is used as security for the loan. The margin loan increases the amount you can invest therefore may offer the potential for greater returns and allow you to grow your investment portfolio faster than you otherwise could just by investing your savings alone. Borrowing money to invest can potentially result in higher returns from your investment portfolio, however, it can also magnify your losses if the value of your investment portfolio falls.

Like any investment product, Westpac BlueChip20 has associated risks and you need to be aware of what they are and how much risk you’re prepared to accept. Westpac BlueChip20 operates in conjunction with a margin loan facility; you should consider the risks explained in the BT Margin Lending Margin Loan Product Disclosure Statement before you apply for this product. Some of the risks of a margin loan include the risk that tax laws may change in the future, the risk interest rates may vary during the term of your investment and that dividends may not be paid from your investments. If your loan balance exceeds the borrowing limit and any allowed buffer for the portfolio, you will have to add funds to your loan or sell some of your investments to restore your loan position below your borrowing limit. This is called a margin call and it is explained in the Westpac BlueChip20 Margin Loan documentation.

Find out more about Westpac BlueChip20Find out how Westpac BlueChip20 can be your ticket into the top 20 companies in the ASX.

Call 1800 816 222, Monday to Friday, 8.00am-6.30pm (Sydney time)

Email client.marginlending@btfinancialgroup.com

Visit westpac.com.au/bluechip20

General advice in this brochure has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, consider its appropriateness and the Westpac BlueChip20 Product Disclosure Statement (including the Supplementary Product Disclosure Statement dated 30 May 2014) and the BT Margin Lending Margin Loan Product Disclosure Statement (each a PDS). Each PDS is relevant when deciding whether to acquire or hold these products. These product disclosure statements are available on the Westpac BlueChip20 website – westpac.com.au/bluechip20.

Any reference to taxation matters is a general statement only and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and proposed announced tax amendments. The individual situation of investors may differ and investors should seek independent professional tax advice on any taxation matters.

Westpac BlueChip20 is a financial product issued by Premium Australia Limited ABN 92 117 611 784 AFSL No. 297956. BT Securities Limited ABN 84 000 720 114 and Westpac Banking Corporation ABN 33 007 457 141 (Westpac) are together the issuers of the BT Margin Lending Margin Loan - Product Disclosure Statement. Neither product is a deposit with or other liability of Westpac or any other company in the Westpac group of companies. They are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Neither Westpac nor any of its respective directors, officers, employees, associates or its subsidiaries guarantee or give any assurance in regard to the capital value, income return or performance of any investment offered in either PDS.

© 2014 Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. BC20a WIBE013 (09/14) 408205

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