Scottish Mutual has finalised the specifications for the second phase of its Income and Growth Plan ...
Scottish Mutual has finalised the specifications for the second phase of its Income and Growth Plan offering 8.05% annual income, quarterly income of 1.92% or growth of 42% over the five-year, two-month period.
The product will be available to the intermediary channel from 1 March with the return of investor's full capital dependent on the level of the Eurostoxx 50 index during the last four years of the product's lifetime.
The first year of index performance is discounted in order to allow market volatility to subside. As a result, Scottish Mutual will determine the starting level of the index in May 2003. If the index falls by over 20% from its level at 3 May 2003 and 3 July 2007, then investors' capital is at risk.
If the stock market recovers to within 20% of its level at inception investors' capital will be returned in full. If it is below this level in the final six weeks of the product's lifetime, it is subject to a one for one fall. If the Eurostoxx 50 drops by more than 30% this loss is 2% for each 1% fall in the index.
There will be a 3% commission payable on the product which has a five-year and two-month term. The product comes after the launch of a previous income and growth plan last year. This had returns based on the performance of 32 FTSE listed stocks including Marconi and ARM Holdings and lasted three years.
£1bn business since inception
Considered doing so in 2015
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