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Morgan tells a simple story

Morgan Stanley

FTSE Simple Growth Plan 10

Type: Capital-protected bond

Aim: Growth linked to the performance of the FTSE 100 index

Minimum-maximum investment: £5,000-no maximum, Isa £4,000-£7,000

Term: Six years

Return: 125% of the growth in the index at the end of the term
Guarantee: Original capital returned in full regardless of the performance of the index

Closing date: August 25, 2006, August 11, 2006 for Pep/Isa transfers

Commission: Initial 3%

Tel:] 020 7425 9000

This product is linked to the FTSE 100 index for six years and offers a full capital return at the end of the term.

Looking at the product in its market context Baronworth director Colin Jackson says: “In this climate of economic uncertainty, adverse comment from the Bank of England and jittery stockmarkets, full capital protection at maturity coupled with an attractive market participation rate should be well received by people looking for potential growth without risk to capital.”

He finds the literature attractive, well written and easy to understand, and the adviser remuneration in line with the market. “There is the facility to invest within an Isa wrapper, as an Isa/Pep transfer or as a Sipp/SAS. The returns are linked to one index only – the FTSE 100 – which we favour,” he says.

Switching his attention to the less appealing features Jackson says: “This is a growth-only product, totally unsuitable for clients who are looking for income. The term of six years is slightly longer that we like to see and the return will be taxed as income. We prefer a product where it is taxed as a capital gain,” he says. He adds that there is nothing new that makes this more attractive than other similar products.

Scanning the market for potential competitors Jackson says: “There have been in the past and will doubtless be in the future, similar products. Currently Barclays are offering the 5 Year Guaranteed FTSE Account Issue K6, which is very similar.


Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good

Overall 8/10


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