Morgan Stanley has launched a retail structured product it says is both cash collateralised and backed by AAA-rated UK gilts.
The Morgan Stanley FTSE Defensive Gilt-Backed Growth Plan offers a pre-defined return of 9% per year, paid as long as the FTSE 100 Index does not fall by more than 10% on each annual anniversary of the plan, for a maximum of three years. The Plan includes a 50% soft protection barrier, observed at maturity only.
The development of the plan is a direct response to feedback from UK financial advisers. A recent Morgan Stanley survey of financial advisers showed that capital protection (32.2%) and credit rating (30.0%) are the most important considerations when recommending structured products to clients, closely followed by participation (26.2%).
The Plan is available for direct investment, SIPP/SSAS investors, ISA investments for 2008/2009, transfers of existing ISAs and discretionary investment. The minimum investment is £3,000.
"As credit risk concerns become more important, we believe we have developed a product drawn from our experience in the discretionary market, as well as direct feedback gathered from financial advisers, which offers retail investors a high degree of credit risk protection, yet still provides potential for excellent returns," says Marc Chamberlain, Morgan Stanley executive director, Structured Products.
"This plan shows our commitment to the financial adviser community as it has been specially created to meet the needs of their clients in this current market."
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