L&G and Meteor Asset Management have both expanded their structured product ranges, with the launch of new plans.
Meteor’s latest launch links returns to the top ten shares, by index weighting, in the FTSE 100.
The so-called Top Ten Kick Out Plan has a six year, two week term and bases returns on the top ten FTSE 100 companies as at 30 September 2011.
These were: AstraZeneca, BG Group, BHP Billiton, BP, British American Tobacco, GlaxoSmithKline, HSBC, Rio Tinto, Royal Dutch Shell and Vodafone.
The plan will mature early and pay 21% at its annual review, as long as shares in eight of the ten companies are equal to or greater than their opening levels.
If the plan is not triggered at the end of the first year it will continue into the second, at the end of which it pays 42% yield if eight of the shares are at or above opening levels.
In each year the kick-out is not triggered the interest paid increases. So in year three it would be 63%, in year four 84%, in year five 105% and in year six (at maturity) 126%, as long as the eight company criteria is met.
The investors capital is at risk if the plan does not mature early and if the final levels of three or more shares are 50% lower than their initial values.
In such a situation the capital return will be based on the share price of the third worse performing companies over the investment term, with capital being reduced by the same percentage that the final levels of the companies are below their opening levels.
The minimum investment into the plan is £10,000 and it is available as a direct investment or through ISAs and pension funds.
The securities are issued by Rabobank, which currently has a AAA credit rating by Standard & Poor’s.
Legal & General’s new product is the third in its series of capital at risk structured growth investments.
The Growth Plan 3 offers investors the potential for a bonus payment of 55% of the original amount invested after five years.
Advisers can either take commission of 3%, or if working on a fee basis, use commission sacrifice.
The product invests in securities issued by Abbey National Treasury Services, backed by Santander, which has a Standard & Poor’s rating of AA.
