Morgan Stanley says the Gilt-Backed Growth Plan 9 is designed for investors with a "moderately positive view on UK equities but no firm view on timing".
The six year plan offers an annual kick out feature from the second year onwards, and will return 7% per annum if the FTSE 100 index is equal to or above its starting level on each anniversary.
The plan offers the same headline rate of 7% per annum that was available in the eighth iteration but no longer gives the option to kick out in the first year.
"With the pricing environment moving away from us over the past two months, we have had to think of new ways to be able to continue providing this product with an attractive return potential. The Gilt-Backed Growth Plan 9 strikes a good balance between risk and reward," said New Godley, vice president, Morgan Stanley.
Capital is at risk if the FTSE 100 has fallen by 50% or more during the product’s term and is below its initial level at maturity; investors will lose 1% of their investment for every 1% that the final index is below the initial level.
The product is backed by UK government bonds, while collateral arrangements minimise exposure to the credit risk of Morgan Stanley.
