Incapital Europe is marketing its first-ever capital-protected structured deposit linked to the FTSE 100 index, with Morgan Stanley as the counterparty provider and Lloyds TSB as the deposit-holder.
The Accumulator Deposit Plan is a six-year fully protected growth structure using a digital/snowball payoff profile. The product will lock in a fixed return of 6% a year on each annual observation date where the FTSE 100 closes at or above its strike level. The product includes a 'memory' feature, allowing the structure to catch up on missed returns even if the underlying falls initially but recovers during the investment term. At maturity, it will return the initial investment plus the sum of the registered returns. The maximum potential return at maturity is 136%
Nev Godley, vice president of Morgan Stanley, said that fully capital-protected products are in high demand. "With interest rates still at historic lows, the opportunities for capital-protected growth without direct equity exposure are limited."
Incapital will have a considerable competitor in the market for the next two weeks as Meteor Asset Management is also currently marketing a structured deposit linked to the FTSE 100, backed by Royal Bank of Scotland and offering potential gross income of 7.25% per annum or 1.4% per quarter. Investec Structured Products is also marketing three deposits of its structured products range.
SRP data shows that Morgan Stanley is a marginal player in the structured deposit space, with only four tranches marketed in 2011 at an estimated sales volume of around £28m. It is also the first time Morgan Stanley has appeared as the bond provider for a structured deposit in the UK market.
The Accumulator Deposit Plan will be open until 30 March. The minimum investment is £3,000.
This product is available in Recent Additions (UK).