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Home > Investments > Structured Products

By Marc Shoffman | Published Jun 20, 2012

Defensive strategy range offers certainty - Godley

For a minimum investment of £3000, the vice-president of Morgan Stanley said investors would benefit from the attractive featurs of the Defensive Digital Growth Plan 7 and Defensive Bonus Plan 3.

He said: “The plans’ most attractive feature is their ability to generate returns in a negative market.

“Not all investors share the same opinion as to how long to maintain a defensive strategy so we are offering a defined short term and the potential for a longer investment period to accommodate these views.”

The Morgan Stanley Defensive Digital Growth Plan 7 is a two-year product that aims to repay 12 per cent to investors if the FTSE 100 has not fallen by more than 15 per cent at maturity. If the index has dropped lower than this, no growth return is generated but capital will be returned in full as long as the index has not fallen by more than 50 per cent on the maturity date.

The Defensive Bonus Plan 3 is a six-year plan that offers 11.5 per cent a year provided the FTSE is at or above 90 per cent of its initial level.

Both plans close for investment on 26 July 2012, except for Isa transfers, which close on 12 July 2012. The plans strike on 16 August 2012.

Ian Lowes, managing director for Newcastle-based Lowes Financial Management, said: “We really like Morgan Stanley’s Defensive Bonus Plan 3, but we are not that taken with Defensive Digital Growth Plan 7 because of the short investment term.

“For an element of a portfolio where a client is prepared to accept the risk of Morgan Stanley as counterparty, we think the terms of the Bonus Plan 3 are attractive.

“There could be some argument that the defensive feature should have been sacrificed for higher return but it serves to reduce the market risk without being of significant detriment to the terms.”

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