Meteor NC FTSE 5 Quarterly Defensive Plan 4

Type: Structured product.

Description: Meteor Asset Management has launched the FTSE 5 Quarterly Defensive Plan 4. It has a five-year, two-week term.

Returns will be based on five of the leading FTSE 100 shares – BHP Billiton, GlaxoSmithKline, HSBC, Royal Dutch Shell Class A shares and Tesco.

It will mature early and pay 4.25 per cent provided each of the shares is at or above 85 per cent of its opening level at the first measurement date. If it matures early it will make a 4.25 per cent payment of the initial investment for each quarter the plan has been in force.

If the plan does not mature early and the final level of the worst-performing share is more than 50 per cent below the opening level, capital will be reduced by the same percentage of that share.

Conditions: Minimum investment is £10,000. The securities will be issued by RBS and IFA commission will be 3 per cent.

Contact: www.meteoram.com

Verdict: David Penny, managing director of Somerset-based Invest Southwest, said: “This is essentially a high-risk specialist product with the potential to lose all of the investment. That said, clearly the small basket of shares is of high-calibre companies. Nonetheless it is vital to understand in these volatile market conditions that underperformance is a possibility and clients must be fully apprised of this fact.

“If there were a cast-iron guarantee I would recommend this product to my clients. But there is none. Good for experienced, otherwise well-diversified investors with an eye for a punt who are happy to pay for some element of protection.”

Three stars