The first issue of this structured product closed towards the end of last year and the follow-up has the same terms. It is linked to the performance of the FTSE 100, EuroStoxx 50 and S&P 500 indices for six years and provides potential returns of 15 per cent for each year the plan is invested.
As the name suggests, the plan has an early kick-out feature based on the performance of the indices to which it is linked. Investors will receive 15 per cent growth at the end of year one provided all three indices are at or above their initial values. If this condition is not met, the product will continue until the end of year two, when 30 per cent growth is payable if all three indices are at or above their initial values.
The product will continue on the same basis in subsequent years providing growth of 45, 60, 75 or 90 per cent in years three, four, five and six respectively. If all three indices are never at or above their initial values at each anniversary, investors will receive their original capital back provided none of the indices falls by more than 50 per cent during the term.
If this happens, the indices would need to recover to at least their initial values for a full capital return to be payable. If they do not recover, investors will lose 1 per cent of their capital for each 1 per cent fall in the worst performing index.
As at January 19, direct competition to this plan was difficult to find. The closest comparisons, from Meteor and Incapital Europe, are linked only to the FTSE 100 and S&P 500 for six years. But they enable the returns from the Walker Crips plan to be put in to context by showing that it is possible to achieve returns of around 10 to 11 per cent for each year of investment through two, rather than three, indices.