Investment firm Jubilee Financial Products has launched the Real Growth Plan, which pays out on the growth of either the FTSE 100 Index or the UK RPI inflation rate, whichever is higher.
The plan invests in securities issued by Santander UK and is designed to appeal to sophisticated investors who believe that the FTSE is likely to grow over the next six years but who are also worried about the prospects of inflation.
Adam Habib, chief executive of Jubilee Financial Products, says: “With inflation expectations high as a result of the UK’s increasing government debt, we felt the time was right for a product that protects against runaway inflation. By using a ‘best-of’ feature, we ensure that this doesn’t come at the expense of participation in potential market growth.”
The plan is a capital-at-risk product, which means that capital can be reduced at maturity if the FTSE 100 Index has fallen by 50 per cent or more at the close of any trading day during the investment term. Investors can benefit from the growth in inflation even if the FTSE 100 has fallen, thus potentially offsetting some or all of the capital loss.
The product is administered by Bank of New York Mellon.
