UBS Share Builders

Key Risks

The following are some of the key risks that will arise when you borrow to invest in UBS Share Builders.  A more detailed description is included in the Product Disclosure Statement for the UBS Share Builders that you buy and you should consult your financial, legal and taxation advisers if you need help to analyse these risks.

  • Borrowing to invest will magnify and accelerate losses as well as gains and borrowing costs such as interest will reduce any returns
  • The underlying share price and the UBS Share Builder price can go up or down and can be volatile
  • No capital protection – you can lose the entire Purchase Price paid for the UBS Share Builder if the underlying share is worth less than the Loan Amount at Maturity
  • Interest rate risk – the Interest Rate applicable to each UBS Share Builder will vary over time and the Interest Rate for future Interest Periods will not be determined until the relevant Annual Interest Date 
  • Dividend risk – if Dividends are lower than expected then the Loan Amount of a UBS Share Builder may not reduce as quickly as you expect.  On the other hand, an increase in expected dividends will increase the cost of the Walkaway Feature which will increase the Interest Amount that is added to the Loan on an Annual Interest Date
  • Tax legislation changes may reduce the after tax return from your investment
  • Early termination – UBS may terminate a Series on an Annual Interest Date so your UBS Share Builder will terminate but you will receive the excess (if any) of the underlying share value over the Loan Amount (the "Net Expiry Value")
  • Early termination for other reasons – a UBS Share Builder will also terminate (a) on an Annual Interest Date if the Loan Amount after Interest is added is higher than the Closing Price of the underlying share (unless UBS has specified that this shall not apply), or (b) if an Extraordinary Event occurs (e.g. delisting of the underlying share)
  • You are exposed to risk if UBS and UBS Nominee Pty Ltd do not perform their obligations (such as to pay you the Net Expiry Value)