Morgan Stanley launches latest structured product

Morgan Stanley has announced the launch of its latest structured deposit plan with Incapital Europe that aims to give investors the ability to receive fixed returns based on the performance of the FTSE 100 index.

The six-year deposit plan, which is called the Accumulator, allows investors to lock-in a fixed return of six per cent a year on each annual observation of the plan that the FTSE 100 index closes at or above its initial level.

At maturity, investors receive 100 per cent of their initial investment, as well as any locked-in returns.

The product includes a ‘memory’ feature that allows investors to catch-up on missed returns even if the FTSE 100 index falls initially but recovers later on during the investment term.

For example, even if the FTSE 100 is less than its initial level each of the first five years, but recovers to be at or more than its initial level on the final observation, then investors will lock-in a return of 36 per cent.

As with Morgan Stanley’s previous deposit-based launches, Lloyds TSB are acting as deposit-taker.

Nev Godley, vice president of Morgan Stanley, said: “There are many cautious investors out there who are looking for fully capital protected products to help protect against market risk.

“With interest rates still at historic lows, the opportunities for capital-protected growth without direct equity exposure are limited.”