Merchant Capital plan links to emerging markets
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Merchant Capital has linked its latest structured product to emerging markets through the S&P Bric 40 index.
The Merchant Capital growth plan: emerging markets provides a return equivalent to 1.3 times the growth in the index after five years and three weeks. Index growth is capped at 50 per cent so that the maximum return is 65 per cent.
Investors get a full capital return unless the closing level of the index on August 25, 2015 is more than 40 per cent below its initial value. If this barrier is breached, investors’ capital will be reduced by 1 per cent for every 1 per cent fall in the index.
Merchant Capital says growth in Bric markets is substantially greater than the UK and that the Bric economies complement each other.
Head of structured products Thom Gascoigne says: “Back-testing on the Bric index shows that a maximum growth payment of 65 per cent was paid in all scenarios and no capital was lost in 100 per cent of scenarios.”
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