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Third outing for Jubilee’s real growth

Jubilee Financial Products has brought out a third issue of its real growth plan, a structured product linked to the performance of the FTSE 100 index and the UK Retail Price Index for a six-year term.

The terms of this plan are identical to the previous issues, which appeared in July and April this year. At maturity, it provides a return equivalent to 100 per cent of the growth in the best performing index. Investors will also receive a full capital return provided the FTSE 100 index does not fall by 50 per cent or more during the term. If it does, investors will still get their original investment back as long as it recovers to at least its initial value by the end of the term. A breach of this safety net will result in a 1 per cent loss of capital for every 1 per cent fall in the index.

A unique feature of this product is that if investors lose capital at maturity because of the performance of the FTSE 100 index, the plan may still pay a return based on growth in the UK Retail Price Index, which could offset the capital loss. This differs from other plans that are linked to two indices and provide growth plus a full capital return only if both indices are at or above a certain level.

However, if the growth in the UK Retail Price Index is less than the fall in the FTSE 100, investors may still get back less than their original investment in to the real growth plan at maturity.

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