Structured investment specialist Blue Sky Asset Management has launched two growth plans offering core holding and tactical investment strategies.
The plans are designed to offer investors solid investment returns potential, without the need for the underlying equity markets to rise during the investment term.
The Capital Accumulator Auto-Call – Dual Index Series IV offers investors 22.5 per cent fixed growth potential at year two, with an automatic early closure feature if the FTSE 100 and S&P 500 indices are at or above their initial levels with no growth in either index required.
If the Plan does not close early at year two, the potential growth payment accumulates by 11.25 per cent per year, with the same index condition applying at each anniversary for up to six years. The plan includes protection from stock market falls, unless the underlying indices fall by more than 50 per cent, during the investment term. The counterparty for the plan is AAA-rated Rabobank.
The Absolute Return Plan offers investors a strategy that captures any movement in the FTSE-100 Index annually, regardless of its direction, and creates positive absolute returns to a maximum of 12 per cent each year.
At maturity, after six years, if the index is equal to or above its starting level the plan will deliver the returns with a minimum of 42.5 per cent built in, and a maximum of 72 per cent (based on 12 per cent per year).
The plan also includes protection from stock market falls, unless the underlying index falls by more than 50 per cent, at maturity. However, the protection barrier is only monitored at maturity in 2016 meaning that index movement during the investment term has no bearing on the plan. The counterparty for the plan is A+ rated Societe Generale.
The Absolute Return Plan is the second launch of this strategy. The average amount invested in the first Absolute Return Plan was in excess of GBP100,000 with approximately 70 per cent of monies invested via pensions wrappers.
Chief executive Chris Taylor (pictured) says: “In the current economic environment, wealth managers and investors continue to find themselves stuck between a rock and a hard place, having to decide whether they are now looking at tentative green shoots of recovery or facing a W- shaped double-dip recession. The simple truth is, however, that the answer is not available – hence governments, bankers, economists and leading fund managers cannot agree on the investment outlook.
“The known facts, however, are that interest rates are low and equity market and other asset class volatility is high – and it seems likely that rates will stay lower for longer than is anticipated, whilst volatility will persist for longer than is hoped. And, against this backdrop, to our minds the pragmatic and honest conclusion to reach is that its is going to be harder to make money in the next five years than it was in the five years before the credit crunch with investment returns less certain and more unpredictable.
“With this in mind, both of the newly launched Blue Sky plans offer wealth managers and investors innovative solutions at this time, and compelling alternatives and/or complements to traditional investment funds, including actively managed absolute return funds. The Capital Accumulator Plan offers a potentially short to medium term tactical proposition, whilst the Absolute Return Plan provides a viable longer term core holding for growth portfolios.”
The Capital Accumulator Auto-Call will close to new business on 18 January 2010, with the deadline for Isa transfers on 11 January, unless over-subscribed. The strike date is 25 January.
The Absolute Return Plan will close to new business on 25 January 2010, with the deadline for Isa transfers on 8 January, unless over-subscribed. The strike date is 29 January.
Minimum investment for either plan is GBP10,000 for direct investment or GBP7,200 for Isas and Isa transfers. Investors aged over 50 can invest GBP10,200.
