The Gilliat Deposit Kick Out – August 2011 and the Gilliat Protected Kick Out – August 2011 are both based on the performance of BAE Systems, Marks & Spencer, Royal Dutch Shell, Aviva and British American Tobacco.
For both products, the level required for a kick-out to occur lowers each year, by 5% each year, from 100% of the start values in year 1 to 80% in year five. At the same time, growth payments start at 8.5% in year one and grow by 8.5% each year.
The counterparty for both is the Royal Bank of Scotland which means the only difference in the two propositions is the structure. The deposit structure attracts income tax while the protected structure attracts capital gains tax.
Adrian Neave, managing director of Gilliat Financial Solutions, explains their launch saying he is constantly being asked for products exposed to the UKonly.
“The underlyings themselves make up some 9% of the FTSE 100 and as a basket show a correlation of 88% with the FTSE 100 index measured over the last five years. We believe that the level of coupon combined with the protection of investment capital could make this a very popular product.”
