The stocks will be chosen based on their size as of 8 May 2013, and at maturity the top performing 11 stocks will be selected giving their average return as capital growth back to investors.
Capital invested in the Morgan Stanley UK Giants Selector Plan 2 is not protected. If the FTSE is more than 50% below the initial level at maturity investors will lose 1% of their initial investment for every 1% that the final level is below the initial level.
Full repayment of invested capital will be made if at maturity the index is at or above 50% of its level when the plan starts.
Marc Chamberlain, executive director, Morgan Stanley, said: “It uses hindsight to automatically select the best performers. Investors are getting exposure to the largest companies listed on the UK stock exchange with the added benefit of some protection if markets fall.
“Simulated back testing from Morgan Stanley shows that this hindsight selection of the top performing FTSE™100 stocks would have produced an average return of 233.94%* of capital over a six year term. ”
The firm launched three capital protected UK-focused structured products earlier in the year.
