Mariana 10:10 Plan February 2023 (Option 3)
Potential for a 12.1% gain for each year held, payable on any anniversary from year two onwards, provided the FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index (FTSE CSDI) closes at least 5% higher than the Initial Index Level with a maximum duration of ten years. This investment was designed in conjunction with Lowes Financial Management – please see ‘Opinion’ for more information, including disclosure of our interests.
Auto-Call / Kick-Out
Capital at Risk
FTSE CSDI (Custom 100 Synthetic 3.5% Fixed Dividend Index)
10 years 2 weeks max.
This maximum ten-year and two-week plan features the potential to mature on any of the plan's anniversaries from year two onwards, provided that the FTSE CSDI closes at least 5% higher than the Initial Index Level, returning the capital investment in full, plus a 12.1% gain for each year the plan has been in force. If the plan fails to mature early and the Final Index Level is below 105% of the Initial Index Level, no gain will be achieved; however, investors' capital should still be returned in full, unless the Final Index Level is more than 30% below the Initial Index Level. If such a fall does occur, the invested capital will be reduced by 1% for every 1% the Final Index Level is below the Initial Index Level. For example, if the plan fails to mature early and the Final Index Level is 35% below the Initial Index Level, investors' will suffer a 35% reduction to their invested capital. 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 is very highly correlated to the FTSE 100 Index, and 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%.
Initial Index Level: The closing level of the Index on 24 February 2023.
Final Index Level: The closing level of the Index on 24 February 2033.
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.
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 Plan February 2023 (Option 3)|
|EVENT / OUTCOME (IF / THEN) SUMMARY TABLE|
|Morgan Stanley default||Return of any capital subject to insolvency proceedings - potential total loss|
|IF NOT …||THEN:|
|If on any annual observation date from year two onwards the FTSE CSDI Index closes at least 5% above the Initial Index Level||Return of invested capital plus a 12.1% gain for each year the plan has been in force|
|IF NOT …||THEN:|
|If at the end of the term, the FTSE CSDI is no more than 30% below its Initial Index Level||Return of invested capital only|
|IF NOT …||THEN:|
|As the FTSE CSDI is more than 30% lower||Invested capital is reduced in line with the fall in the Index on a 1% for 1% basis|
Lowes Financial Management, the Chartered Financial Planning and advisory firm behind StructuredProductReview.com and Lowes Structured Investment Centre, shares ‘Opinions’ on Preferred Plans with registered Professional Advisers accessing StructuredProductReview.com. Opinions are usually reached following an assessment of the Plan in question and other Plans available at the same time. Opinions and the award of Preferred Plan status are reached on balance. Plans may lose their 'Preferred' status if an alternative Plan becomes available which in the opinion of Lowes Financial Management has more attractive terms, on balance.
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. We feel that the 12.1% potential coupon, payable from year two onwards, in moderately bullish market conditions where the FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index (FTSE CSDI) rises by at least 5%, coupled with the extended maximum term of ten years providing increased anniversary opportunities for the investment to successfully generate positive returns, makes this a compelling investment proposition. 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.
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