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Merchant Capital launches second tranche of emerging markets plan


Merchant Capital has launched a second tranche of the Merchant Capital Kick Out Plan: Emerging Markets, which offers investors exposure to Brazil and China.

The plan is a three year plan and offers investors a growth payment of seven per cent (gross) semi annually (14 per cent per annum) with the possibility of an early maturity if both of the underlyings are five per cent or more above their initial levels on any of the twice yearly kick out dates.
The plan is linked to Brazil via the iShares MSCI Brazil Index Fund and China via the Hang Seng China Enterprises Index.
The maximum growth achievable (after three years and two weeks) is 42 per cent, subject to counterparty risk.
The return of capital at the end of the term is dependent on the performance of the two underlyings and is not guaranteed. If either has decreased by more than 50 per cent from its initial level measured on maturity only, investors will lose some or up to all of their capital.

It is available as a direct investment but not for Isas.

The minimum investment is GBP5,000 up to a maximum of GBP2m.
John Gracey at Merchant Capital says: “We are offering a second tranche of this plan to accommodate strong demand from our clients. It offers investors significant upside driven by two of the most important BRIC emerging markets, Brazil and China. There is considerable doubt as to the prospects for the more mature markets of US and Europe, but the consensus is that prospects for growth in the emerging markets are stronger and more certain.”

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