The Bull & Bear tracker is designed to provide investors with a return above their original capital in both rising and falling markets.
The plan is linked to the FTSE 100 index for a term of six years,. If the index rises over the term, investors will receive 100 per cent of this growth. On the other hand, if the index falls, investors will receive a return equivalent to this fall, capped at 50 per cent.
Investors will receive only their original capital back in two circumstances – if the final index level is the same as the starting level, or if the index falls by more than 50 per cent but does not recover to at least its starting level by the end of the term.
According to the Structured Retail Products adviser website, this product is unique. Although Birmingham Midshires recently launched a five-year FTSE 100 linked bull/bear product, this is now closed.
The bull and bear concept could be regarded as the equivalent of an each way bet and may have appeal for cautious investors who are not sure about the direction of the stockmarket over the next six years. The Arc product may also attract interest due to its full capital protection
However, some investors with a more positive view of the UK stockmarket may prefer a product with higher growth potential if the index grows. In this case, the Barclays FTSE 100 capital protected investment note may be more appealing.
This product offers 140 per cent of the growth in the FTSE 100 index at the end of the six-year term, plus a full capital return. However, if the index were to fall after six years, investors with the Barclays product would receive only their original capital after six years.