Like many other structured products, it aims to allow investors the ability to take positive returns in volatile or even falling markets. In this case, Morgan Stanley says it is the ‘booster’ aspect of the plan that will allow investors to get a positive return even if the index, the FTSE 100, falls by up to 50%.
In effect, the Morgan Stanley FTSE Booster Plan doubles the final value of the FTSE 100 as a percentage of its initial level. For example, if the FTSE100 ends up at 75% of its initial value, investors will receive 2×75 (i.e. 150%) of their original investment, representing 50% growth on their initial outlay.
If the FTSE 100 has risen, stayed at the same level, or fallen by less than 20% over the six-year term, the plan will return capital plus 60%.
It will accept investment from this Wednesday (12 October); its strike date is 14 December; its maturity date is 14 December, 2017.
