According to the product specifications, the Meteor FTSE 5 Enhanced Quarterly Defensive June 2013 will aim to pay 3.75 per cent on the net investment for each quarter that it is held.
Term: Six years, two weeks
Conditions: 3.75 per cent quarterly gain is payable on any quarterly observation date from the fourth quarter onwards, provided all five shares close no more than 15 per cent below their respective initial levels.
Maturity payout: 90 per cent growth payment at maturity if the lowest-performing share is no more than 50 per cent lower than its initial level
Closing date: 12/06/2013
Isa transfers: 31/05/2013
Product type: Capital at risk
Investment type: Auto-call/Kick-out
The five shares are: BP, BHP Billiton, GlaxoSmithKline, HSBC Holdings, Vodafone Group.
Adviser view
Ian Lowes, principal of Newcastle-based Lowes Financial Management and founder of StructuredProductReview.com, said: “If the product does not mature early, and on 14 June 2019 the final level of one or more of the five shares is below 50 per cent of its opening level recorded on 14 June 2013, investors’ capital will be reduced by 1 per cent for every 1 per cent the worst-performing share is below its initial price.
“For example, if the product does not mature early and the final level of the worst-performing share is 55 per cent below its initial price investors would lose 55 per cent of their invested capital.”
