The February 2020 issue of the Mariana 10:10 plan is now available for investment. As usual this is a limited tranche which Strikes on the 21 February 2020. In view of the timing of the Strike date we expect it to attract a lot of early interest. This likely demand emphasises the need to place Investments at the earliest opportunity so that investments can be secured as early closure due to meeting capacity could arise.
Please find attached & below details of this tranche which is again underwritten with Goldman Sachs (S&P A+ Stable) as the chosen Counterparty.
Key Points to consider:
The product continues to be available in three formats all of which are linked exclusively to the FTSE 100 Index.
- All options provide the opportunity to achieve attractive returns in a controlled/pre-defined manner held as part of a diversified & well-balanced portfolio in uncertain & flat market conditions. If you assume a start level of the FTSE 100 at Strike similar to where the market is currently (7642 [as at 14/1/2020 @ 9.54am]), then with Option 3 the contract terms provide for returns of 13.25% p.a. with the need only for the Index at the second or any future anniversary to be at 8024 or above for this to happen. When the Plan Kicks Out/Autocalls all returns are, of course, accompanied by the full return of the original Invested Capital.
- The Plan Strike date for all Options is on the 21st February 2020. The deadline for ISA Transfers is 29th January 2020 (applications need to be received at this office by 22nd January 2020).
- Remember that the longer the Plan runs in practice, the higher the equivalent Market would need to get in order for an investor’s main portfolio to match the returns offered.
- The traditional Step-Down version of the FTSE 100 linked Plan – Option 1 enjoys the enviable track record of a ‘perfect’ back-test underpinning it. Quite simply from every possible start date since the inception of the FTSE 100 in January 1984 it would have always worked for investors.
- The Back-testing of structured products is a precise science – as the actual terms of the strategy, which are defined by contract, are used with the actual performance of the index. (these are not ‘hopes and aims’, as is the case with active fund management, or even passive, where tracking error, charges, etc., have a bearing: structured products are legal obligations on the issuer to deliver precisely what they have stated the contract terms to be).
- One of the key advantages of the 10:10 Plan continues to be that it has been designed to combine the benefits of short term annual kick-out potential, from the 2nd anniversary, with a longer investment term to maximise the annual opportunities for successful kick out and the scale of snowballing / accumulation of potential coupons before maturity.
All 3 Plan options for this tranche are underwritten with Goldman Sachs as the Issuer & Counterparty. Click the link in order to take you to the Plan Documents (Brochure, KIDS, Application Forms etc)
Headline contract terms are as follows:
This is a ten-year plan based on the performance of the FTSE™ 100 Index, the underlying asset. The plan has three options and is constructed to offer a potential return of 8.10% in Option 1, 10.90% in Option 2 and 13.25% in Option 3 for each year the plan runs with the possibility of early maturity and the full repayment of initial capital from the end of the plan’s second year and annually thereafter. The potential return is only payable if the plan kicks out.
Should the closing price of the underlying asset on an observation date be at or above the kick out trigger level, the plan will mature early, repaying your initial capital plus the potential return multiplied by the number of years the plan has run.
The kick out observations begin on the second anniversary date and continue on an annual basis until the plan’s maturity date (from 21 February 2022 to 21 February 2030).
If the Plan has not already kicked out, initial capital will be repaid in full at the end of the plan’s term if on the maturity date (21 February 2030) the closing price of the underlying asset is not more than 30% below the start level.
If on the maturity date the closing price of the underlying asset is less than 70% of the start level (representing a decline of more than 30% from the start level), your initial capital will be lost at a rate of 1% for every 1% the closing price of the underlying asset is below the start level.
The Counterparty chosen for this plan is Goldman Sachs International. Goldman Sachs & Co. Wertpapier GmbH, an affiliate of Goldman Sachs International, is the issuer of the underlying investments that are purchased on your behalf with the money you have invested.
Goldman Sachs International is part of The Goldman Sachs Group, Inc. which is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centres around the world. At the end of Q3 2019 it had a common equity tier 1 ratio of 13.4%. More information on Goldman Sachs International can be found on their website www.goldmansachs.com.
Goldman Sachs International acts as guarantor of the securities issued by Goldman Sachs & Co. Wertpapier GmbH, which means that Goldman Sachs International will make the payments under the securities if Goldman Sachs & Co. Wertpapier GmbH is unable to fulfil its payment obligations. You may lose part and up to all your investment if Goldman Sachs International goes into liquidation and defaults on paying your Plan return and the repayment of your initial capital.
Don’t Forget the Risks
As with all forms of investment there are risks involved. These plans do not guarantee to repay the money invested. The potential returns of the plans and repaying the money invested are linked to the level of the stock market and also depend on the financial stability of the Issuer and Counterparty Bank.
The promotion of the plans does not constitute ‘advice’ to invest. Advice is always specific to an individual investor’s circumstances and needs, following the process of ‘know your customer’, with the aim of ensuring that any product is suitable for an investor.
As always, the recommendation and common sense approach is to consider product solutions as a portfolio, never over-exposing oneself to a point of financial pain and suffering liquid or counterparty exposure.
At the Best Price FS price point (when combined with our smiley and helpful service) the Mariana 10:10 Plan and the 3 options are certainly worthy of consideration for inclusion within investment portfolios.
Simply get in touch if you wish to receive regulated advice in relation to the ‘suitability of the plans to meet your investment needs’.
Best Price FS Team