Investec Bank has reported that six of its structured plans matured early this month, paying out up to 16% growth at the first potential knock out date.
Gary Dale, head of intermediary distribution at the South African bank, said: “As an alternative to cash deposits/fixed rate savings bonds, structured deposits have the potential to add real value to a portfolio. With simple annualised returns of up to 6.7% pa, compared with average five-year savings rates available two years ago of around 3.66% pa. This is a great example of how structured products can be a real asset in a wider portfolio.”
According to Investec, the FTSE 100 Defensive Kick-Out Plan 3 matured after two years, returning 100% capital invested plus 16%. By comparison, the FTSE 100 Total Return Index and the FTSE100 rose 28.41% and 19.36% over the same period. The plan offered 8% pa provided that the FTSE100 was higher than 90% of its initial level, and had downside soft-protection of 50%.
The FTSE 100 Enhanced Kick-Out Plan 38 matured after one year, returning clients’ initial investment plus 11.25% (Investec version), 8.25% (Investec commission version) and 8.25% (UK5 version). By comparison, the FTSE100 Total Return Index and the FTSE100 rose 8.7% and 4.96% respectively over the same period.
Additionally, the FTSE 100 Kick-Out Deposit Plan 30 matured after two years, offering 13.4% and 10.5% for the adviser fee and commission versions respectively. To put things into perspective, the average five-year fixed term bond available at the time of investment was 3.66% pa.
Following on from last month’s report on well-performing structured deposits, these latest early maturities reinforce the case for including such plans as part of a diversified portfolio.
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