Meteor Asset Management has launched two structured products which are linked to a basket of five FTSE100 shares.
The FTSE 5 quarterly kick-out plan 2 and the FTSE 5 quarterly defensive plan will both have their returns based upon basket of five of the leading FTSE100 shares, BHP Billiton, GlaxoSmithKline, HSBC, Royal Dutch Shell Class A and Tesco.
The kick-out plan will mature and pay 5 per cent at the first quarterly measurement date so long as each of the five shares is at or above 95 per cent of its opening level.
The defensive plan will mature and pay 3.5 per cent per quarter if on any measurement date the closing prices of all five shares are at least 85 per cent of their respective opening levels.
The minimum investment is £10,000 with both products maturing in September 2016. The securities will be issued by RBS.
In the event that maturity is not triggered in the first quarter the plan continues into quarter two where if the criteria are matched on the second quarterly measurement date it will pay 10 per cent for the kick-out plan and 14 per cent for the defensive plan. The plan continues until all five shares are at or above 95 per cent and 85 per cent of their opening levels at any quarterly measurement date and therefore could pay an investment return of 100 per cent at maturity.
Capital is at risk at maturity in the event that the plan has not matured early and the worst performing share is more than 50 per cent below its opening level. In this case the capital will be based on the price of the worst performing share, with capital reduced by the same percentage that the Final Level of the worst performing share is below its opening level.
Meteor managing director Graham Devile says in reference to the FTSE 5 quarterly defensive plan:“Based on our successful FTSE 5 Plan, the defensive version in the series will appeal to the more cautious investor seeking some exposure to equities.
The 85 per cent call level means that a significant market correction could occur whilst still providing investors with an attractive rate of return.
In reference to the kick-out Plan he says: “This popular kick out structure and a slightly defensive call level means this Plan offers an interesting alternative to investing directly in equities.”