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Morgan Stanley launches structured Oeic for discretionary asset managers

Morgan Stanley is launching its first structured Ucits III Oeic via its Irish-domiciled fund platform.

In July, Money Marketing reported that Morgan Stanley was looking to launch its first structured product within an Oeic by the end of the year.

Following the launch the firm can now offer funds, notes, third party notes and preference shares to its clients.

The payoff for the FTSE 100 accumulated capital fund I offers accumulating capital growth for each day the index closes within 3,200 and 7,000 points over the initial three-year investment period. The maximum capital growth achieved if the index closes within this range on every day during the period is 23 per cent.

After three years, the investment strategy is expected to be rolled in line with prevailing market conditions, thereby avoiding crystallising capital gains for investors.

Protection applies as long as the index remains above 3,200 points throughout the investment term. If the index closes at or below this level during this period, capital is reduced in value by 1 per cent for each 1 per cent that the final level is below the initial level. Capital return is calculated independently to the growth return.

Cash invested is collateralised daily through G20 government bonds to mitigate counterparty risk.

Direct investments are potentially liable for capital gains tax and the fund is also eligible for Isa, Sipp or Ssas investments and can be invested into an offshore bond.

Managing director Nick Coghill says: “We have launched a competitively priced fund which will satisfy investor appetite for synthetic zeros and mitigate counterparty credit risk by using G20 paper. This is a demand-driven product, using one of our most popular strategies, for investors seeking a home for cash in a market where there is no strong clarity on direction.” 

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