Blue Sky Asset Management has launched a structured investment product designed to act as a response to the turbulent market events of 2007.
The Protected Income Plan is the first product from new structured product specialist Blue Sky. It offers an income stream of 10% per annum and 100% contingent capital protection at maturity over a six-year term and a 65% downside portfolio barrier level.
The Barrier Level offers 100% capital security, even allowing for falls of up to 65% in one or all of the shares in the Portfolio, at any time during the investment term, without risk of capital loss to investors. It is only triggered by closing prices and the plan also includes three month averaging which spreads the measurement of the final value of the stocks over this period.
If the Barrier Level is breached at any point, the percentage capital loss at maturity will be 1% for 1% in line with the value of the worst-performing stock in the Portfolio.
The plan is based upon a portfolio of the five most highly capitalised banks in the UK: HSBC Holdings, RBS, Barclays, HBOS and Lloyds TSB.
Chris Taylor, chief executive of Blue Sky, says: “By pinpointing specific stocks, we have been able to dissect the indiscriminate fall out in the banking sector to isolate, select and take advantage of major and established, financially strong, UK based or centric stocks, at dramatically sold off levels. We have locked in their high dividend yields, for six years, enhanced them, and delivered them back to investors with the benefit of an exceptional capital protection barrier.”
The plan is for both institutional and retail investors and is open until 8 February 2008. Intermediaries will receive three days notice if the fund is oversubscribed.
Minimum investments are £10,000 for direct investment, including SIPPs, and £7,000 if invested through a maxi-ISA.
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