The old maxim “If it seems too good to be true, it normally is” crossed my mind when I saw the terms for the NDF growth kick-out plan which opened for investment on July 24.This is the third issue of this structured investment plan and, as before, it is linked to the FTSE 100 and Nikkei 225 indices. For this tranche, the rate has increased from 9.75 per cent to 11 per cent. It pays a fixed return of 66 per cent after six years, provided that neither index is lower than its starting level. This is a structured capital at risk product and the capital is at risk on a 1:1 basis based on the worst-performing index if either breaches its 50 per cent safety net and fails to recover. A feature of the plan is its potential to “kick out” and mature earlier than six years. It can mature on any anniversary from one year onwards, provided that both the indices are at least the same or higher than their starting level, paying 11 per cent for each year invested. Furthermore, returns from direct investments in the plan will be subject to capital gains tax rather than income tax. How have NDF managed to increase the rate to 11 per cent? The answer is that over the past couple of months, short-term volatility in the two markets has increased and this has a big impact on the way that this structure prices. Put simply, higher volatility equals a higher rate. In addition, lower index levels makes this type of structure more attractive. So, too good to be true? Apparently not. It seems that NDF has taken advantage of market conditions and produced an investment opportunity which offers real value.