By Andy Pennie, Marketing Director, Cater Allen.
“Out of this nettle, danger, we pluck this flower, safety”
William Shakespeare, Henry IV Part I
The Cater Allen Selected UK Banking Plan 2 offers a way to capitalise on the current weakness of the banking sector, provides 100% capital protection at maturity, and is open to all.
It’s a truism that the time to invest is when a market is low, but those same conditions tend to worry most individual investors (and not a few professionals) – who are more likely to keep their capital in cash and out of the markets until renewed activity is well under way and much of the opportunity has been missed.
Pension investors in particular are generally unwilling to go for recovery situations – especially those near to retirement, who are more usually inclined, even in relatively stable times, to quit equity investment altogether to protect the value of their benefits in the run-up to pension age.
Structured products can offer a way for these investors to participate in potential market growth while safeguarding their capital. By employing a combination of derivatives to capture returns – and other financial instruments to provide the appropriate protection – they allow investors to enjoy most of the fruits of a market opportunity without putting their funds at risk by investing directly in equities.
Cater Allen’s Selected UK Banking Plan 2 gives investors the opportunity to capitalise on the future growth potential of UK bank shares and the sector’s emergence from its current depressed position, but with the peace of mind of 100% protection of their capital at maturity.
Returns will reflect the performance of a basket of 4 UK bank stocks – Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland – during the next 6 years. The Plan has a 6 year term from the investment ‘strike’ date of 27th November 2008, at the end of which investors will receive back the whole of their original investment plus the averaged growth achieved by the shares in the basket over the period.
However, that is not the entire story. Another attraction of the Plan for investors will be that it is capable of early maturity at an earlier anniversary in years one to four – providing a full return of their initial investment plus a fixed payment that will be equivalent to a return of 11% p.a. (not compounded).
Progress of the shares in the basket will be monitored at an observation date shortly before each Plan anniversary from the first to the fourth years (ie. 2009 to 2012). If all four stocks are at the same value or have risen in value since the start of the Plan on November 27th 2008 then it will mature early at the anniversary date. So, depending on when this early maturity criterion is met, the total payout would be 111% of the initial investment after one year, 122% after two years, 133% after three – or 144% after four years. If it does not mature early in year 4, the Plan will run to its full term.
These represent very attractive rates of potential return for a capital secure investment in today’s market – and for investors participating in the Plan via a SIPP, or for those choosing to invest through an ISA, those returns will be tax-free.
Cater Allen is part of Santander Private Banking and Grupo Santander, and is therefore part of one of the largest banks in the world, and the largest in the euro zone*.
This limited time offer is open to investors until Friday, 7th November 2008. Minimum investment in the Plan is £7,200 and the maximum is £1 million.
For more information about the Cater Allen Selected UK Banking Plan 2, please go to www.CaterAllenStructuredProducts.co.uk
* Based on market capitalisation as at 8th August
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