Investments  

Meteor in RDR-compliant structured products launch

The provider’s Defensive Dual Index Kick-Out is a six year, two week investment which tracks the FTSE 100 and Eurostoxx 50 Index, and kicks out a growth payment of 13.25 per cent of each year of the product from year two if the level of the index is at least 95 per cent of its opening level, in addition to returning capital.

The Defensive Dual Autocall differs from the Kick-Out plan by offering 11.75 per cent for each year the product has been in force, with a full return of capital, while the FTSE 5 Enhanced Quarterly Defensive plan is based on the performance of five FTSE 100 share holdings, namely Aviva, BHP Bilton, BP, GlaxoSmithKline and Tesco.

It makes a quarterly payment of 4.85 per cent of funds invested if each share reaches a measurement date at 85 per cent or above of its opening level, and provides a growth payment of 116.4 per cent if the final level of the lowest performing share is at or above 50 per cent of its opening level.

The FTSE 5 Quarterly Income plan invests in the same holdings and pays 2.25 per cent gross per quarter, payable throughout the term. It is not dependent on the performance of the shares, but is subject to counterparty risk.

Meanwhile, the Kick Start FTSE Autocall plan kicks out if the index is at 100 per cent of its opening level. The growth amount payable ranges from 20.3 per cent for year two, to 44.9 per cent for year five.

REACTIONS

PROVIDER VIEW

Graham Devile (pictured), managing director of Meteor Asset Management, said: “The shares for the Quarterly Income Plan offer investors the opportunity to benefit from an enhanced rate of income than is usually offered by the FTSE 100 alone, while the FTSE 5 Enhanced Quarterly Defensive plan is proving to be a useful way of generating an attractive coupon in an investment environment which remains unsure of its direction.” Mr Deville added that the Kick Start FTSE Autocall plan offered: “A very attractive coupon from the first kick-out opportunity, which then snowballs by 8.2 per cent for each year the product remains in force.”

ADVISER VIEW

Ian Lowes, managing director for Newcastle-based Lowes Financial Management, and founder of Structured Product Review, said: “These products demonstrate the commitment of Meteor to the structured product market.

“The fundamental difference to them compared to those launched in 2012 is that they are RDR-friendly and that they are no longer available through a standard plan structure. Instead, they can be accessed through the Omnium platform and other wraps.” Mr Lowes added that the 50 per cent capital protection barrier on all five products offered “peace of mind”, while the FTSE Quarterly Income plan’s 9 per cent fixed annual income was an “inviting return” despite a potential downward spike which could see the barrier being breached. He added that the Dual Index Kick-Out and Autocall products were similar, and that he was “not uncomfortable with the counterparty of RBS”, while the Kick Start FTSE Autocall plan did not offer terms as favourable as competitors due to the coupon reducing to 8.2 per cent after the second year.

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