Mariana 10:10 Income and Growth Plan May 2021
Potential for gross quarterly income payments of 0.75%, provided the FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index closes no more than 30% below its Initial Index Level on any quarterly observation date. The plan will terminate early from year three onwards if the Index closes at least 5% above its Initial Index Level on any quarterly observation date, returning original capital in full in addition to a gain of 1% for each quarter the plan has been in force. This investment was designed in conjunction with Lowes Financial Management – please see ‘Opinion’ for more information, including disclosure of our interests.
Growth and Income
Capital at Risk
FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index
Morgan Stanley & Co. International plc
10 years 1 weeks
This maximum ten-year one-week structured investment aims to generate gross quarterly income payments of 0.75%, which are dependent upon the performance of the FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index throughout the investment term. Income will be paid provided that on each of the quarterly observation dates, the Index closes at a level no more than 30% below its Initial Index Level. If on any quarterly observation date the Index does close more than 30% below its initial level, no income payment will be made in respect of that period. The plan will terminate early from year three onwards if on any quarterly observation date the Index closes at least 5% above its Initial Index Level, in which case investors' original capital will be returned in full in addition to a 1% gain for each quarter the plan has been in force, plus the income payment due for that period. If the plan fails to mature early and the Final Index Level is more than 30% below its Initial Index Level, then investors will suffer a reduction to their invested capital of 1% for every 1% the Final Index Level is below the Initial Index Level. The FTSE CSDI was created specifically for structured products. It aims to closely replicate the performance of the same 100 companies, but after including the dividends – the equivalent to the FTSE 100 ‘total return’ index, from which, a constant annual dividend of 3.5% is deducted. The FTSE CSDI index may therefore be expected to perform in a similar way to the FTSE 100 Index although, it would be expected to slightly underperform the latter if the total dividend yield transpires to be less than 3.5%. The correlation of FTSE CSDI to the FTSE 100 over a 10-year simulated back-test is 98.26% (Mariana). For more information on the FTSE CSDI, please click here.
Initial Index Level: The closing level of the Index on 21 May 2021.
Final Index Level: The closing level of the Index on 21 May 2031.
Tax Treatment if held outside Tax Shelter: The product literature states that under current legislation any gain produced by this investment at redemption will be subject to Capital Gains Tax rules applicable at that time, and any income payment will be paid gross and subject to UK Savings Income Tax at the investor’s highest marginal rate.
Please note, tax rules and legislation are subject to change at any time.
Administrator: James Brearley & Sons
Custodian: James Brearley & Sons
Capital at Risk Barrier Observation: (Subject to Counterparty Solvency)
Capital at Risk Barrier Observation Type: End of Term only
Barrier Level: 30.00% Below Initial Index Level
Explanation: If the investment fails to produce a gain, it still aims to return investors' capital in full at maturity, unless the Final Index Level is more than 30% below the Initial Index Level. If such a stock market fall occurs, investors' capital will be reduced in line with the percentage fall in the Index.
Charges: Unless stated otherwise charges do not affect the amount being invested as they have been taken into account in the terms of the investment. So, for every £100 invested, the return, provided the investment is held until maturity, should be £100, plus or minus the gain or loss in accordance with the defined terms. Separate fees may be payable to your adviser, platform or stockbroker for arranging this investment.
The initial charge incorporated in the terms of the investment: Initial charges are not expected to exceed 2%.
If surrendered early, the value will be dependent on a number of factors and may be less than the original amount invested.
Early Surrender: £200
Early ISA Transfer: £200
|Mariana 10:10 Income and Growth Plan May 2021|
|EVENT / OUTCOME (IF / THEN) SUMMARY TABLE|
|Morgan Stanley & Co. International plc default||All payments will cease|
|IF NOT …||THEN:|
|If the FTSE CSDI is equal to or above 70% of the Initial Index Level on the relevant quarterly observation date||Quarterly income of 0.75% gross|
|IF NOT …||THEN:|
|If the FTSE CSDI is below 70% of the Initial Index Level on the relevant quarterly observation date||No income payment for that period|
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The launch of Lowes Structured Investment Centre, a trading style of Lowes Financial Management, introduces Plans to the market that are developed with the input of Lowes Financial Management / Lowes Structured Investment Centre, in co-operation with the sector’s issuers and providers. These product co-operations are designed to help extend product ranges across the sector, building on areas of strength and interest with each Sector Partner. Sector Partners must be members (or pending members) of the UK Structured Product Association (UKSPA). The product co-operations are designed and developed with the active input of Lowes Financial Management / Lowes Structured Investment Centre and on principle they must be good enough to meet Lowes Financial Management’s assessment as independent Professional Advisers for use with our own clients.
This investment was conceived and developed with input from Lowes Financial Management. The 10:10 Income & Growth Plan combines an income element with potential capital growth. The Plan offers investors a potential regular income stream of 0.75% per quarter for up to 10 years, though its short-term kick-out feature means that the Plan can successfully mature on any quarterly observation date from the third anniversary onwards, earning a capital gain at maturity that increases by 1% for each three month period the Plan has been in force. The extended maximum investment term is a simple innovation designed to increase the likelihood of the plan generating positive returns through an increased number of quarterly income payment and early maturity opportunities. Increasing the maximum term also repositions investor exposure to stock market risk through a protection barrier that is only observed at the end of the ten-year term. While it should be acknowledged that the barrier at 70% of Initial Index Level is lower than typical in the market, this needs to be considered in the context that this is only observed at the end of the ten years and then only in the event that an earlier maturity was not triggered. On balance, we feel that this is potentially appropriate for use in a diversified portfolio, for those who understand and accept the risks. Lowes has provided input into the concept, development, promotion and distribution of this Plan. The provider’s charges/fees are built into the terms of the investment - Lowes has a commercial interest in the Plan as a result of its involvement in its development and promotion. All Plan returns are stated after allowing for the provider’s charges/fees. Where Lowes is involved in advice on or the intermediation of this investment to retail clients, it will not be paid any fee from Mariana for its input. The aim of developing Plans in co-operation with providers, with Lowes input, is that they should be amongst the best available in
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