Blue Sky Asset Management (BSAM) has launched its Asset Allocation Accelerated Growth Plan III which it believes will be attractive at the onset of bear markets.
The Plan is designed to deliver outperformance potential in major markets in the US, UK, Europe or Japan. It provides 100% capital protection at maturity, contingent on 50% downside barriers in each market.
Structured over a six-year term, the AAA Growth Plan allows investors to select their own asset allocation in the respective stock markets including individual market weightings or any combination of all four.
The plan is designed to provide outperformance potential and cannot underperform benchmark indices unless markets stay at zero or grow by exactly 60%.
The first tranche of the plan was launched in February and the second in May.
Assets raised in the first two offers, showed aggregate asset allocations by investors in the first product were 30% each to the UK and Europe, 25% in the US and 15% in Japan.
In the second product, close to 50% was allocated in the UK with a broadly equal spread to the US, Japan and Europe, indicating investors’ desire to bring assets closer to home as uncertainty in global markets became more evident, says BSAM.
The AAA Growth Plan delivers performance in two stages. In the first, investor returns are ten times the growth of the FTSE 100, S&P 500, Europe’s Dow Jones EuroSTOXX 50 or Japan’s TOPIX indices, up to a maximum first tier return of 60%. If the markets grow by 1% a year and therefore 6% over the six year term, the plan will deliver a return of 60%.
The plan adds further gearing in the second stage and provides unlimited outperformance of the underlying indices above 60% based on 125% for the S&P 500, 175% for the FTSE 100, 200% for the EuroSTOXX 50 and 200% for the TOPIX.
“The AAA Growth Plan should appeal to all prudent and astute investors – reducing market risk, turning virtual sideways market movements into high absolute investor returns, whilst also providing the potential for exponential out performance of markets, by design, if growth is strong,” says Chris Taylor, chief executive at BSAM.
The Barrier Levels are only triggered by closing prices and the plan also includes six months final averaging, which spreads the measurement of the value of the indices prior to maturity.
Each market is selected and accessed independently within the plan, so any potential loss within one market does not impact on any other. There will also be initial averaging for the third issue of the plan. Therefore, opening levels of each market index will be the average values of the indices selected between June and September.
This mitigates current volatility in global stock markets, offering investors a form of ‘phased entry’ that can meet short term concerns about investment timing, says BSAM.
The plan closes to new investors on 5 September, with ISA transfers accepted until 22 August.
It can also be accessed through pension schemes including SIPP and SSAS and is available for corporate, trustee and charity investment. The strike date is 12 September.
Minimum investment is £10,000 or £7,200 for ISAs. Explicit plan charges are zero while commission for intermediaries is 3% initial which can be rebated to enhance investments.IFAonline
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