The Digital Growth Plan reduces exposure to market risk through a defensive digital investment strategy, while aiming to receive substantial fixed growth.
Incapital said the strategy of the Digital Growth Plan was designed with current market conditions in mind and that the investment will pay a return even if London’s blue chip index falls.
The firm cited volatility in the main UK share index since the start of the year as a motivation to buy the product.
In August the FTSE 100 fell by 7.23% and on 5 Sept it closed at 5,102, down 16.4% from its year-high on 21 February 2011.
Specifically, Incapital’s product offers growth of 30% plus 100% return of capital at the end of the four year term if the FTSE 100 is at or above 70% of its intial value.
If the index is below 70% of the initial vlaue but at or above 50% of it then investors get their capital back, but no growth.
In a worst case scenario, if the bourse is below 50% of its initial level then investors will lose their capital on a one-for-one basis to the fall in the index.
The plan is open with immediate effect until the 26 September and its strike date is 7 October, with a four year maturity date.
Counterparty to the plan is Morgan Stanley, which has an S&P rating of A.
Investors can invest directly in the plan or acquire it through pension schemes. Standard intermediary commission for the plan is 3%, which can be rebated and explicit charges are zero.
