Morgan Stanley has unveiled details of its latest structured product that is to use UK government bonds as collateral.
The Morgan Stanley FTSE Gilt-Backed Growth Plan is the company’s first gilt-backed plan since December last year. It offers investors a return of up to 7.25% per year saying “the time is right” for a return to a government bond-baked product.
The returns depend on the performance of the FTSE 100 and investors will receive 7.25% if the index is at or above its start level on the anniversary of the plan from year two onwards.
The plan opened to investors on 14 June and closes on 26 July.
On the first observation date, assuming the FTSE 100 is at or above its start point, the plan will kick out and receive any growth on top of a full capital return.
Capital is protected as long as the FTSE 100 does not fall by 50% or more during the six-year term.
On 14 June, Morgan Stanley also reissued its FTSE Booster Plan 6 and Protected Growth Plan 49 both of which play on the fortunes of the FTSE 100 index.