The UBS Global Access Fund provides investors with exposure to Australia's top 200 companies, a choice of Capital Protection Levels and the potential for enhanced participation to a possible market recovery. They will also offer to approved investors, the ability to borrow up to the protected amount from UBS, with the certainty of an Australia Taxation Office (ATO) Product Ruling and interest rates starting from 6.99%pa.

Key features and benefits of UBS Global Access Fund:

􀂾 Diversification benefits of having exposure to the top 200 Australian listed companies on the Australian Stock Exchange (ASX);

􀂾 Opportunity to participate in potential market recovery with the benefit of Capital Protection of 90% or 100% of your invested funds as at the 'Capital Protection Date';

􀂾 The potential for leveraged exposure: Participation Rates up to 120% for Class G Units and up to 155% for Class H Units, fixed for the Term;

􀂾 Exposure to Index performance for a term of 5 years;

􀂾 Monthly unit redemptions available;

􀂾 Loan interest rates starting from 6.99% p.a. and no margin calls;

􀂾 Interest deductions in the current financial year for interest prepayment, up to the RBA Indicator Rate for standard housing loans; and

􀂾 Minimum investment amount of $20,000 for ungeared investors (minimum of $10,000 Units per Class). Minimum Loan amount of $100,000 for Class G and $90,000 for Class H, if you elect to borrow to invest.

This investment could be suitable for investors seeking growth from the Australian equities market and not reliant on dividends and/or franking credits.

Investors who believe recent equity market turmoil provides a buying opportunity but want the safety net of 90% or 100% capital protection at maturity.

Investors utilising any investment loans should be comfortable with the risks associated with borrowing to invest. Investors should be comfortable funding interest payments from their own financial resources.

If you would like to discuss your personal situation please email or phone Scott (scott@money- mechanics.com.au) or 02 6257 5557.

As with other learnt human behaviours, money and investment is something you need to upskill around. If the idea of borrowing $100,000 to invest in the share market feels a little scarey there are options to get started with as little as $2,500 lump sum and regular savings of $250 per month which can give you the guidance and education around being in the market in a structured way.

Westpac has launched a new product called 'BlueChip20', where you can own a portfolio of shares in the Top 20 Australian companies listed on the ASX. This is a geared investment so you need to be aware of the advantages and disadvantages of borrowing money for investment.

What are the money mechanics of this?

1. Dollar cost averaging is a strategy to take advantage of the price movements in the share markets. 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 is a regular savings and investment plan, only it's geared. You effectively double the amount you can invest.

2. Gearing is the use of other people's money for investment purposes. This product uses a margin loan structure geared to 50%. You need to be aware of the benefits and risks of using such a product. Depending on your personal financial circumstances you may also be able to claim the interest payments on the loan as a tax deduction.

3. Brokerage when you normally buy shares can be expensive. If you buy lots of small packages of shares in different companies you pay brokerage on each transaction. This product 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).

4. Tax benefits come from franked dividends. Most of the top 20 companies have shares which pay fully or partially-franked dividends. This means there is an input tax credit attached to a portion or all of the dividend at the company rate of 30%. As a result, when you are assessed for tax purposes on these dividends, you will generally only have to pay the difference between the company rate and your marginal tax rate (subject to satisfying the relevant holding rules).

If you're new to the share market and want to get a foot in the door, or looking to educate your children about investment this could be a solution.

This type of product is available all year round, please contact Money Mechanics if you want to find out more information.

Being a non-correlated (unrelated) product to the share or property markets this type of investment product can ensure you have diversification across market and asset classes. Not all agriculture projects are the same and you should ensure the project has been researched adequately.

You should be sure that the project you are entering has a solid track record and can meet its targets.

A project that I have found, which is slightly different with a lower timeframe, is the Arafura Pearls Project.

You should be sure that the project you are entering has a solid track record in the three key areas of: corporate governance; track record of the manager; and project review with ability and contingencies in place to meet targets.

By way of background Arafura Pearls is an ASX listed company and is Australia's second largest farmer of Australian South Sea Pearls. Established in 1998, they have been harvesting pearls in NT since 2001, and raising money from the retail market for their projects since 2005.

In general the Australian pearling industry is attractive because it has high barriers to entry. Pearl farmers must buy quota to allow them to farm pearls. The maximum number of shells that can be seeded each year is 1,342,000. This equates to only 5- 6,000 strands of round or near round necklaces sold into the worldwide market each year. The high establishment costs of pearl farming means the large participants enjoy significant profits as their marginal cost of production decreases. Whereas smaller participants may struggle. As mentioned above Arafura Pearls is the second largest farmer of pearls in Australia (they hold 20% of quota). Furthermore there are limited sites available where pearls can be farmed.

Basic parameters of the 2009 investment are:

􀂾 Minimum investment $12,600 plus GST;

􀂾 6.5 years project timeframe;

􀂾 Income distributions paid at 4.5 years and 6.5 years;

􀂾 100% tax deductible in FY 2009 (have final ATO product ruling);

􀂾 Terms payment option (10% payable on application with remaining due in 9 equal monthly instalments over following 9 months); and

􀂾 Finance available through Agripay (5 years Principle & Interest or 2 years Interest Only and 3 years Principle & Interest).

The project has the following risk management strategies in place:

Arafura Pearls guarantee that 1 interest will offer Growers 100 seeded shells at year 2. Arafura are effectively guaranteeing the first third of their project - I am not aware of other agribusiness mangers who are doing this.

Third party insurance can be bought from Sunderland Marine Mutual Insurance from year 3 onwards. This is an all risks cover. The insurance cost is capped at 1.5% of agreed insured shell value. This is to the cost of the grower.

2009 BONUS TAX DEDUCTION

I have also been informed that the Federal Government's "Small Business Tax Break" announced on 12 May 2009 will apply to Growers who invest in the Arafura Pearls 2009 project.

Small business entities will be able to claim a bonus tax deduction of 50% for investment in new and existing tangible, depreciating assets costing $1,000 or more, for which a deduction is available.

We are informed that 90% of costs associated with the establishment of Arafura Pearl's 2009 MIS project are likely to be depreciable in this manner, and therefore entitled to the bonus deduction this financial year.

The Government bonus will increase the total deduction for each interest from 100% up to approximately 140%.

This project is only open until the end of financial year, so if you wish to discuss this or other options please contact Money Mechanics.