Incapital Europe – the London-based affiliate of US investment bank Incapital LLC – is targeting the tax year end and ISA season with a quartet of structured investment strategies.
Open with immediate effect and running through to 11 April, facilitating double tax year ISAs, the award winning structured investment specialist’s new suite of Plans includes two auto-call strategies, covering developed (UK and US) and developing markets (Greater China) plus international equities (UK, US and Europe) with no market risk and a defensive equity income strategy.
The latest offers of the award-winning Capital Accumulator Auto-Call Plan Series continue to offer advisers a choice of the UK’s FTSE 100 index and the US’s S&P 500 index, in the 14th issue of the Dual Index Series, or access to the only retail auto-call Plan in the market to target the economic powerhouse region of Greater China, via the pairing of the Hang Seng China Enterprise and MSCI Taiwan indices.
Incapital’s new Protected Growth Plan offers an international equity portfolio, equally weighted to UK, US and European blue-chip equities, with accelerated (2x) upside growth potential and full protection from downside market risk.
And a second issue of the Equity Income Plan offers high fixed income of 7.2%pa, with a deep-set income condition and protection barrier. The first tranche, which closed in January, proved popular with advisers, attracting support as a solid alternative to the low returns of cash, the uncertain returns of equity income funds, and the inflation and interest rate risks increasingly associated with fixed income/bond funds.
The new range of Plans offer investors innovative investment solutions and increased counterparty diversification, with three different counterparties highlighting a key advantage in Incapital’s position as an independent structured investment provider operating with substantial international scale.
Strategy one, the Capital Accumulator Auto-Call Plan – Dual Index Series XIV. is a six-year auto-call strategy offering 10.5% annual growth potential, from the end of the first year, accumulating by 5.25% every six months thereafter. The Plan auto-calls at the first anniversary, or subsequent 6-month trigger point, where the FTSE-100 and S&P 500 indices are simply at or above their initial starting levels – with no growth in either index required. The counterparty is A rated Morgan Stanley.
Strategy two, the Capital Accumulator Auto-Call Plan – Greater China Series II, is a five-year strategy linked to the Hang Seng China Enterprise and MSCI Taiwan indices, providing 13% growth potential at the first anniversary, accumulating by 6.5% every six months thereafter. The Plan auto-calls at the first anniversary, or subsequent 6-month trigger point, with no growth required in either index. The counterparty is AA- rated Barclays Bank
Protection from market risk is provided in both Capital Accumulator Auto-Call Plans through a 50% ‘American barrier’, which is monitored daily using closing index levels.
Strategy 3, the Protected Growth Plan – International Equity Series, is the firm’s first fully protected strategy since 2009 and provides two times (200%) participation in any upside growth in the international portfolio of mainstream, blue-chip equities, via the FTSE-100, S&P 500 and EuroSTOXX50 indices, to a maximum of 55% over six years – with no exposure to market downside. A 27.5% rise in the portfolio will generate the maximum investor return of 55%. The counterparty is AA rated Santander UK plc.
Strategy four, the Equity Income Plan – FTSE-100 Series II, is a six-year income Plan paying 1.8% income per quarter (7.2% annually), if the FTSE-100 is simply at or above 60% of its initial level. Capital is also protected using the same 60% barrier, with an innovative ‘Bermudan’ barrier, which is only monitored quarterly (as opposed to daily with ‘American’ barriers). All income payments will be achieved together with full repayment of capital unless the FTSE-100 falls by more than 40% – ie approximately 2400 points from FTSE 100’s current level of c6000 points – at any quarter during the investment term and remains below its starting level at maturity. The counterparty is A-rated Morgan Stanley.
Chris Taylor, Managing Director of Incapital Europe, says: “The new quartet of plans, accompanied by a new media campaign, the ‘International Traveller’, draws attention to Incapital’s strengths as an independent firm operating internationally with genuine scale – over $70billion was traded through Incapital’s various note programmes in 2010 alone – and emphasises our intentions and ambitions in 2011 and beyond, as we build our business in the UK and Europe.
“January saw an immediate and strong start to the year, reflecting UK professional advisers’ recognition of and appetite for the arrival of an independent structured investment firm operating at the pre-requisite level, ie with scale and resource.
“We have rotated counterparties, highlighting a fundamental advantage of our independence vis-à-vis providers who are tied to single or a limited number of institutions, and we have combined research-backed investment thinking with significant trading advantages to develop strategies with investment integrity, from an asset allocation and portfolio planning perspective, and compelling risk/return profiles, ie terms.
“All four Plans provide solid asset allocation options, as alternatives and/or complements to active or passive funds, with double tax year ISA availability, as the tax year end approaches and investors increasingly seek solutions to low interest rates, rising tax and uncertain returns from equity and bond funds.’’
All Plans are available as ISAs (for 2010/2011 and 2011/2012 tax years : allowing a maximum tax free investment of GBP20,880 per individual); Direct Investment, including through Pension Schemes, including SIPPs and SSAS; and for Corporate, Trustee and Charity investment. The minimum investment per Plan is GBP10,000 and GBP5,000 for ISA Transfers.
Explicit Plan charges on all four Plans are zero and standard commission for intermediaries is 2.75%, which can be rebated to enhance investments. Incapital offers preferential terms to advisory firm that engage with it – and highlights that fee-based advisers choosing to rebate commission can enhance the growth or income potential of the Plans for investors.
Incapital has created an independent force in structured investments and fixed income securities, operating internationally, with genuine scale, depth of resource and capability, leveraging significant counterparty and trading advantage. Working closely with progressive independent wealth management firms and professional advisers – including offering the scope to develop bespoke and exclusive solutions – Incapital is focused upon delivering unparalleled client-centric investment integrity. For further information about how Incapital is moving the market forward please contact Chris Taylor, Managing Director, Incapital Europe.