Structured Product offering March/April 2017

As Deposit rates remain at record low levels, below is a list of some Tax efficient Structured Products currently available in the Irish Market.

Warning: These are Capital at Risk Products, If you invest in these products you may lose some or all of your Money.

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Investec: Kick-out Plan 15

Underlying investment:

  • EuroStoxx 50 Index

Investment Return:  3 Options Available

  • Enhanced Option: Investor benefit from a potential return of 9% pa if the Index is above 100% of its opening level on any of the annual observation dates. If not, the product will continue until the next observation date. This process continues until the Index is above 100% of its initial level or until maturity on the 5th Anniversary.
  • Defensive Option: Investor benefit from a potential return of 6.5% pa if the Index is above 95% of its opening level on any of the annual observation dates. If not, the product will continue until the next observation date. This process continues until the Index is above 90% of its initial level or until maturity on the 5th Anniversary.
  • Cautious Option: Investor benefit from a potential return of 4% pa if the Index is above 90% of its opening level on any of the annual observation dates. If not, the product will continue until the next observation date. This process continues until the Index is above 90% of its initial level or until maturity on the 5th Anniversary.

 

Risk: Investors will receive back their initial capital in the event that the Index has not fallen by -40% or more at any point during the life of the product. If the Index falls by 40% or more at any time during the term of the Investment and finishes below its initial level then Investors may lose some of their capital.

Term: Min term 1 year, Max term of 5 years.

Counterparty: Royal Bank of Scotland (Moody’s A3, Fitch BBB+)

Liquidity: The bond offers Daily liquidity.

Memory Feature: Yes

Taxation: Any gains are subject to DIRT (If applicable)

Closing Date: April 12th 2017

Minimum Investment: €25,000

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Blackbee: Dynamic Global Equity 2, (Step-down version)

Underlying investment: 4 Leading Indices

  • Estoxx 50 Index
  • S&P 200 Australia Index
  • Stockholm 30 Index
  • S&P Canada Composite Index

Step Down Feature

Investors in the Bond benefit from a potential return of 7% pa if all 4 indices are above the Auto-call level. The Auto-call level is set at 100% at year 1 and “steps down” at a rate of 5% pa thereafter to its lowest level of 80% in year 5.

Observation Dates Step Down (% of Initial Levels)
Year 1 100%
Year 2 95%
Year 3 90%
Year 4 85%
Year 5 80%


Term: Min term 1 year, Max term of 5 years.

Capital Risk:

Investors will receive back their initial capital as long as none of the 4 Indices have fallen by more than 45% at Maturity. If any Index has fallen by 45% or more, Investors will receive back the actual performance of the worst performing Index.

Investors Benefit from Soft Capital Protection at Maturity provided by EFG International

Counterparty: EFG International

Liquidity: The bond offers Daily liquidity

Taxation: Capital Gains Tax (CGT)

Closing Date: 26th April 2017

Min Investment: €25,000

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Broker Solutions:  Kick out Bond

Underlying investment: 4 Leading Global Indices

  • Estoxx 50 Index
  • S&P 500 Index
  • FTSE 100 Index
  • Nikkei 225

Investment Return:

  • (Option A) = Investors in the Bond benefit from a potential return of 5% pa if all 4 indices are above the Auto-call barrier of 90% of Opening Level. The earliest call date is on the 1st Anniversary, Quarterly thereafter until the product has Auto-call or max 5 years.
  • (Option B) = Investors in the Bond benefit from a potential return of 5% pa if all 4 indices are above the Auto-call barrier of 95% of Opening Level. The earliest call date is on the 1st Anniversary, Quarterly thereafter until the product has Auto-call or max 2 years.

Term:

  • (Option A) = Min term 1 year, Max term of 5 years.
  • (Option B) = Min term 1 year, Max term of 2 years.

Capital Risk:

Investors will receive back their initial capital as long as none of the 4 Indices have fallen by more than 40% at Maturity. If any Index has fallen by 40% or more, Investors will receive back the actual performance of the worst performing Index.

Investors Benefit from Soft Capital Protection at Maturity provided by BNP Paribas

Counterparty: BNP Paribas

Liquidity: The bond offers Daily liquidity

Taxation: Any gains are liable to Capital Gains Tax (CGT)

Closing Date: 24th March 2017

Min Investment: €25,000

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Blackbee: Gold Twin Win 10

Underlying investment: 3 Gold Related Stocks:

  • Newmont
  • Gold Corp
  • Randgold Resources

Investment Return: The Investment provides for potential 5% return every 6 months (10% p.a.) if all Underlying Stocks finish at or above initial starting levels. If all stocks are above their Initial level on any of the 6 month anniversary dates then the product will mature early.

Twin Win Feature: If the product does not mature early, a return of 15% is payable at Maturity if all 3 of the Underlying Stocks close higher than 60% but below 100% of initial starting level.

 Risk: At Maturity, if one of the stocks is lower than the 60% Barrier level (equivalent to a 40% fall), then initial capital is reduced by the negative performance of the worst performing stock.

Term: Min term 6 months, Max Term 3 years.

Counterparty: EFG International

Taxation: Any gains are liable to Capital Gains Tax (CGT)

Closing Date: 26th April

Minimum Investment: €25,000

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BCP: Equity Index Kick out Bond

Underlying investment:

Euro iStoxx Equal Weighting 50 Index

Investment Return:  Investor benefit from a potential return of 8% pa if the Index is above its opening level on the 1st anniversary date. If not, the product will continue until the 2nd anniversary date when the potential return is 16%. This process continues until the Index is above its initial level or until maturity on the 6th Anniversary.

Risk: Investors will receive back their initial capital in the event that the Index has not fallen by -50% or more at maturity. If the Index falls by 50% or more at maturity, investors will receive the actual performance of the Index, no matter how much it has fallen. Soft Capital Protection provided by Societie Generale.

  • Term: Min term 1 year, Max term of 6 years.
  • Counterparty: Societie Generale
  • Liquidity: The bond offers Daily liquidity.
  • Taxation: Any gains are liable to Capital Gains Tax (CGT)
  • Closing Date: 7th April 2017
  • Minimum Investment: €20,000

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Barry Kerr BBS QFA CFP® is the owner of Wealthwise Financial Planning, Bridge St, Carrick on Shannon, www.wealthwise.ie. Barry Kerr T/A Wealthwise Financial Planning is Regulated by the central Bank of Ireland. All details and views contained within this article are for informational purposes only and does not constitute advice. Wealthwise Financial Planning makes no representations as to the accuracy, completeness or suitability of any information and will not be liable for any errors, omissions or any losses arising from its use.