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Defaqto on Morgan Stanley’s FTSE Gilt-Backed Growth Plan 9

View of Defaqto insight analyst for funds Fraser Donaldson

Donaldson says: “Like many structured products, this one does what it says on the tin with the added advantage of protection from counterparty risk through a government securities vehicle.

“Depending on whether or not the kick-out feature is activated the term could be anything from two to six years. If the FTSE 100 is the same as or higher than it was at the strike date on the second anniversary the kick-out is activated and 14 per cent is paid. If it is not, the level of the FTSE is measured on subsequent anniversaries and if on any one of these the level is the same as or greater than the starting level, 7 per cent is paid for each year of the term.

“If the FTSE 100 does not reach the starting level on any of the anniversaries, the capital is returned unless the index drops below 50 per cent of its starting level at any point in the term. In this case the capital return is reduced by the same percentage as the fall in the index.

“Investors that are nervous about the markets and are not confident about real returns may find this investment worthy of consideration. Capital return is not guaranteed but there is a significant amount of downside protection and 7 per cent a year is certainly better than can be achieved through deposit accounts.

“Being a kick-out plan the point of achieving maximum potential return is uncertain, which may make some aspects of financial planning difficult. It is worth pointing out for those advisers who like to like to asset allocate, that although this plan is linked to the FTSE 100, the returns will almost certainly not reflect the actual movement in the index.


Fairbanking mark in bid to restore trust

Research company Ipsos Mori has linked up with with not-for-profit company Fairbanking Foundation to launch a financial services quality standard in a bid to to re-establish trust in banks and other financial services firms. The fairbanking mark, similar to the Fairtrade standard on food, launched this week alongside an award ceremony for firms that offer […]

S&P gives Greece worst sovereign rating

Standard & Poor’s yesterday downgraded Greece to CCC – the worst sovereign rating in the world. The downgrade reflected the increasing likelihood of Greece defaulting and follows numerous downgrades from other ratings agencies. A majority of economists and fund managers have been convinced since last year that Greece will have to restructure its debts. In […]

Model agents

Cherry Reynard reports on the trend towards model portfolio services as advisers look to outsource their investment management

Derek Stuart: where to find value in the UK?

Derek discusses a number of Œself-help stories as examples of where he is finding good opportunities in the UK With the FTSE trading at historically high levels, many investors have questioned whether UK equities continue to offer value. But, as Derek points out, the headline figures mask many opportunities at a sector level. He has […]


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