Macquarie and Meteor team up for infrastructure linked plan

2 December 2009 7:35 am

This capital-protected product is linked to the performance of the S&P Global Infrastructure index, comprising 75 infrastructure companies, for a term of six years and two weeks.

Investors have the potential to receive 100 per cent of the growth in the index, capped at 50 per cent of the original investment. They may also receive annual bonus payments of 2.85 per cent of their original investment if the index is at or above its initial level at any anniversary.

Bonus payments will not be made if the index has grown by 50 per cent or more because the plan will mature early. In this case, a full capital return plus the index-based growth payment will be made.

If the plan runs to maturity, investors will receive a full capital return provided the index does not fall by more than 25 per cent by the final day of the term. Bigger falls will result in capital loss, based on a calculation that compares the starting and final levels of the index and multiplies the difference in percentage terms by 1.333 times. For example, if the index falls by 40 per cent, the final index level is 60 per cent of its starting value. Multiplying 60 by 1.333 per cent produces just under 80 per cent, so investors will receive this amount of their original capital and lose around 20 per cent. This is better than losing 1 per cent for every 1 per cent fall in the index.

The Structured Product Review website, which is maintained by IFAs for other advisers, says that as far as it knows, this is the first UK structured product linked to the S&P Global Infrastructure index. It feels thepotential annual income payments, early maturity and less than one for one downside makes this an interesting, but convoluted, product.

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