While technically a derivative product, warrants are an alternative method to purchasing securities outright. Their features and benefits include:
- low purchase cost
- being an eligible form of self-managed superannuation gearing
- enhanced investment income, including dividends and franking credits
- potential to unlock wealth through a cash extraction strategy
- portfolio protection, and
- loss management.
Although warrants boast potential income and deduction benefits, and offer exposure to the broader market without the need to own a large portfolio, they are not without complexities and risks.
Join us as we explore the ways in which warrants can be a wise choice for the right investor in the right situation.
- define what a warrant is and describe the various types of warrants traded on the ASX
- indicate the size of the warrants market in Australia
- discuss the key features of warrants, including their unique naming conventions
- evaluate the benefits and risks of warrants
- differentiate warrants based on their characteristics
- analyse the suitability of different types of warrants for investors and self-managed superannuation funds
- outline the disclosure requirements, and trading and settlement processes associated with dealing in warrants
- explain key considerations you should raise with a client if they express interest in purchasing a warrant and when you recommend an appropriate warrant strategy.
Looking for a RG146 CPD solution? This course also forms part of our complete online CPD solution, , which enables financial participants and organisations to meet ASICs RG 146 ongoing training requirements.