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Morgan Stanley fills three-year income gap

Morgan Stanley&#39s latest addition to the structured product market is a capital-protected bond, which provides annual income over a three-year term.

The FTSE 100 income plan provides a single option of 6.5 per cent income a year but the degree of capital protection is dependent on the performance of the index. Investors will get their original capital returned only if the index never falls by more than 30 per cent at any point during the term. When calculating the returns, the closing level of the FTSE 100 index is taken on November 18, 2003 and compared with the closing level on November 18, 2003.

Even if the index falls beyond 30 per cent and subsequently recovers by the end of the term, capital is automatically reduced by 10 per cent. Then an additional 1 per cent reduction for every 1 per cent fall in the index below the starting level is made, which could wipe out all the original capital.

Morgan Stanley&#39s offering stands out from the current crop of structured products by producing annual income over a short period. Other products with a three-year term such as Standard Life&#39s three-year guaranteed bond, are focused only on growth.

Norwich Union&#39s fixed income plan is a more conventional five-year FTSE-linked bond which offers a choice of annual, monthly or rolled-up income at the end of the term. The 5.75 per cent annual income it offers is lower than that offered by Morgan Stanley but it will be paid for two more years.

Like the Morgan Stanley bond, capital is at risk if the FTSE 100 index falls by 30 per cent or more.

However, the capital protection is slightly less stringent because if the index falls beyond this point then recovers by the end of the term, investors get a full capital return.


MCCB finds protection gap on loans

The Mortgage Code Compliance Board has highlighted a gap in consumer protection if the Financial Ombudsman Service is not authorised to rule on complaints relating to mortgages purchased before FSA regulation starts next October.Chairman Colin Harris says the current position is that, post-regulation, consumers with mortgage complaints will be able to turn to the FOS. […]

EFG Private Bank – New Capital Total Return Bond Fund

Type: Ucits Aim: Growth and income by investing in fixed-interest securities Minimum investment: Lump sum £3,500, $5,000, euros 5,000 Place of registration: Dublin Investment split: 100% in fixed-interest securities Charges: Initial subject to negotiation, annual 1% Commission: Subject to negotiation Tel: 0207 872 3700

Put the focus on advice, not product sales

The September 4 issue of Money Marketing featured a long letter from Dave Harris, an IFA, whingeing about a client allegedly pinched from him by the Pru.I am afraid I don&#39t have much sympathy. I have little doubt that he gave excellent advice. The problem appears to be that the client did not value the […]

New manager for ISIS Pacific Growth Fund

ISIS Asset Management have appointed Mark Williams as the lead manager on its Pacific Growth Fund.The fund is the company&#39s retail Asia ex Japan OEIC sub-fund and was enlarged in August through the integration of four existing retail funds FP Pacific Basin, FP Asian Equity, ISIS Pacific Growth and ISIS Far East.Williams&#39 appointment follows the […]

Certification guide

Guide: how to… certify your pension scheme

Certification is highly complex and surrounded by a minefield of information and auto-enrolment jargon, which can make it very difficult to understand. However, for many employers it is a necessary process that must be executed successfully.


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