5.3% per year, even if the FTSE falls…
Where will the FTSE be in the medium term? It’s a fair question to ask, especially as we have recently seen the Index partially recover since the onset of the global pandemic last year. If you’re not convinced it will continue to rise, but consider 5.3% annual growth is a good return, the FTSE 100 Step Down Kick Out Plan from Causeway Securities may be worth a closer look.
The plan will ‘kick out’ and return your original investment along with 5.3% for each year invested (not compounded) provided the level of the FTSE 100 Index is above the required level at the end of each year. The required level is 105% of its starting value at the end of year 2, reducing by 5% each year thereafter, down to 85% in the final year.
If the FTSE is below the required level each year, no growth return will be achieved at the end of the plan and your original capital will be returned unless the FTSE 100 Index has fallen by more than 35% from the opening level. If it does, your initial capital will be reduced by 1% for each 1% fall, so you could lose some or all of your initial investment.
For investors who are not confident the stock market will continue to rise in the coming years, a plan that offers investment level returns even if the FTSE 100 falls by up to 15%, could be an attractive opportunity.
Potential Return: 5.3% per annum in years 2, 3, 4, 5, or 6
Capital At Risk Product
Available for Stocks & Shares ISA, ISA Transfer and Direct Investments. Also available to businesses, charities, trusts and SIPP and SSAS pension schemes
Investment term: Maximum 6 Years
Arrangement fee applies
Minimum single investment: £10,000
Maximum ISA investment: £20,000
No maximum for ISA transfers and non-ISA investments
ISA Transfer Applications: 4 June 2021
Direct & ISA Applications: 18 June 2021
Reduced arrangement fee: For investments of £100,000 or more into this plan, processed through Fair Investment Company, your arrangement fee will be reduced to 2% of your original investment.
Important Information: This is a structured investment plan which is not capital protected and is not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.