It is linked to the FTSE 100 and FTSE Xinhua China indices and pays out 19.5 per cent return on the first anniversary that both indices are at or above their initial index level.
Capital is protected unless at any time one of the indices falls by 50 per cent or more. So, for example, if both indices are the same or higher at the end of the first year, the plan matures and the investor will get back initial capital and a growth payment of 19.5 per cent.
If, for example, both indices do not rise until the sixth anniversary and neither indices falls by more than 50 per cent during the period, then the plan matures and the investor will receive back the initial capital and a growth payment of 117 per cent.
However, if one of the indices does fall during the period by more than 50 per cent, then no growth will be paid out and capital will be reduced by 1 per cent for each 1 per cent of the closing level of the lower index below the starting level of the lower index.
I believe that the chances of achieving these high returns are very likely but, of course, there is some risk.
It is probably the last chance of achieving such high returns on Kick Out plans as volatility is now very low and it is likely that the rates on these plans will fall dramatically shortly.
China’s economy will grow over the next few years and its stockmarket should rise too. While the FTSE 100 could fall over the next two or three years, it is most unlikely not to rise again in the next six years.
I rate this product highly for all investors except the very conservative, especially as CGT is the only tax paid for direct investments and there is no tax liability if invested through Isas or pensions funds.