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Morgan Stanley gets defensive

Morgan Stanley has introduced a new structured product, the FTSE defensive gilt-backed growth plan.

To minimise the associated credit risk with the plan, both government bonds and collateral arrangements are used to help secure returns.

The plan may mature early, on each annual anniversary of the plan start date if the FTSE 100 Index level is at or above 90 per cent of its starting level. Investors can receive a maximum return of 27 per cent on their initial investment if the kick out feature is not triggered until the final year.

Provided that at maturity, the FTSE 100 Index has not fallen by 50 per cent or more since the start of the plan, the initial investment is fully protected. Otherwise investors’ capital is reduced by 1 per cent for each per cent the index falls.

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