Tempo (Issue 21) Long Kick-Out Plan (3 options)

Question: How do you improve the likelihood of investing in a kick-out product with the lowest / most defensive barrier level of any similar products in the market, with options that include the lowest / most defensive conditions for positive returns to be generated,and exceptional potential returns?

Answer: Consider investing in one (or more!) of the three options available in the Tempo Long Kick-Out Plan!

Please read on for full details of the three options available via this Tempo plan …

Tempo has now launched Issue 21 of its product suite.

You can find a summary of the Long Kick-Out Plan and links to the full details below, including details of comparable products and our analysis of the potential returns …

The end of term barrier level for the Tempo Long Kick-Out Plan is set at 50% (allowing a 50% fall) over the next decade: the lowest level for any capital at risk products currently available!

In addition, the Long Kick-Out Plan includes ‘defensive’ options with very low conditions for generating positive returns.

As always, please see the full plan literature for full details of the plan and the features, terms and conditions, including the risks.

Demand for Tempo’s plans has been high recently, so please contact us swiftly if investing is of interest.

Tempo’s Long Kick-Out Plan (counterparty Société Générale) optimises the popular kick-out strategy, through the simple step of combining a longer maximum term, with short term kick-out potential, and defensive index conditions.

The potential returns of each option of Tempo’s LKO are:

> LKO1 allows the FTSE 100 FDEW to fall by 5% p.a
up to 35% on the 10th anniversary / end date., from the 3rd anniversary,

> LKO2 allows the FTSE 100 FDEW to fall by 2.5% p.a., from the 3rd anniversary, up to 17.5% on the 10th anniversary / end date

> LKO3 simply needs the FTSE 100 FDEW to be at or above 100% of its start level, on any of the kick-out anniversaries or on the end date

The following section provides brief details of other currently available products and analysis of the potential returns on offer currently (as at 14.06.21):‘DEFENSIVE AND STEP DOWN’ KICK-OUT PRODUCTS

There are currently 12 defensive and step down kick-out products available in the market, including Tempo’s LKO1 and LKO2.

> Re comparable* step-down products, the average potential return of the other 8 defensive products is just 5.56% p.a., two of which are linked to the FTSE CSDI, rather than the FTSE 100 (compared to LKO1 at 5.75% p.a. and LKO2 at 7.65% p.a.). However, when comparing to Tempo’s LKO1 all of the other defensive products have higher end of term barrier levels and higher final step-down kick-out conditions.

No other defensive single index kick-out products step down as low as Tempo’s LKO1 (to 65%) or have lower end of term barrier levels than Tempo’s LKO plan (at 50%). Of the 10 other defensive kick-out products: 1 has an end of term barrier level set at 70%; 6 are set at 65%; and 3 are set at 60%.Notably, the potential kick-out return of Tempo’s LKO2 (which allows the FTSE 100 FDEW to fall to 82.5% of the start level) is greater than the potential kick-out return of all other currently available ‘defensive’ products (including single and dual index linked products).

There are currently 16 at the money (‘atm’) products available, which require the index to be at or above the start level, and 6 above at-the-money (‘>atm’) products, which require the index to have risen, which are single index linked..

> Tempo’s LKO3 offers 9.90% p.a., with an at or above start level condition throughout the investment term.

> Re comparable* ‘at or above the start level’ products, the average potential kick-out return of the 15 other atm kick-out products (13 of which are linked to the FTSE 100; 1 of which is linked to the FTSE CSDI; and 1 of which is linked to the MSCI UK Sustainable Select 50 3.5% Decrement Index), excluding Tempo’s LKO3, is 6.88% p.a.

The Tempo LKO3 plan is offering more than 3% p.a. more than the average potential return of these products, i.e. nearly 10% more return over 3 years and 30% over 10 years.

No other atm or >atm kick-out products have lower end of term barrier levels than Tempo’s LKO plan (at 50%). Of the 20 other atm and >atm single index kick-out products: 2 have end of term barrier levels set at 70%; 11 are set at 65%;  6 are set at 60%; and 1 matches Tempo’s plans at 50%.

Notably, the potential kick-out return of Tempo’s atm LKO3 betters the potential kick-out return of all other provider’s atm index-linked kick-out products of any type, including  dual index products.

*Comparisons to other products is based on analysis of all products in the market as at 14.06.21 using FVC research reports, comparing potential returns and product features. It should be noted that the Tempo plans use an equal weight, fixed dividend version of the FTSE 100, known as the FTSE 100 FDEW. This was developed by FTSE Russell specifically with the aim of helping investment banks provide better terms on structured products. The FTSE 100 FDEW will perform differently to the FTSE 100, due to the equal weighting and the fixed dividend approach. This means that the returns from plans linked to it might be higher or lower than the returns from a similar plan linked to the FTSE 100. Please also see the section below with further important information regarding the FTSE 100 FDEW.

Tempo’s plans all come with their fabulous ‘Stated terms or better‘ pledge.This unique feature allows Tempo to increase the terms of a plan above those stated in brochures, if the stock market and other factors during an offer period mean that they can do so.

For example, while the Long Kick-Out Plan brochure details option 3 as offering 9.90% pa, if stock market movement and other factors mean that Tempo can increase this further during the offer period, the actual terms may be increased to, say, 11.5% pa, which would be confirmed following the start date.

In Issue 12, LKO3 was ‘supposed’ to offer 13.1% p.a., as stated in the brochure, but this was increased to 20.4% p.a. during the offer period, as a result of the pledge!

What’s not to love about this great feature, which only Tempo offers?!

As we’ve explained previously, Tempo have drawn on strong team knowledge of indexation and a research-based approach to index selection, with their plans using an equal weight, fixed dividend version of the FTSE 100, known as the FTSE 100 FDEW.

The FTSE 100 FDEW was developed by FTSE Russell specifically with the aim of helping investment banks offer improved terms (e.g. lower end of term barriers; lower conditions for generating positive returns; and higher potential returns) on structured products. Société Générale have an exclusive license with FTSE Russell to use the FTSE 100 FDEW. And Tempo have agreed exclusivity to use the index in their plans with Société Générale.

However, it should be noted that the FTSE 100 FDEW will perform differently to the FTSE 100, due to the equal weighting and fixed dividend. This means that the returns from plans linked to it might be higher or lower than the returns from a similar product linked to the FTSE 100.

Neither equally weighted nor market capitalisation weighted indexes are better or worse than the other.  Each offers a different approach and has different merits: risks and returns will be different for each and will depend on the future stock market environment and the performance of the companies in each index.

While the fixed dividend can help provide higher potential returns or lower risks for structured products, it can affect the level of the FTSE 100 FDEW negatively, when the fixed dividend is higher than the level of dividends being paid by companies in the index.

Information about the FTSE 100 FDEW can be found in the plan brochures.

Tempo’s products are described as ‘deliberately defensive’, meaning that they are all designed so that they can generate some or all of their returns without requiring the market index which they are linked to, to rise, with a defined level of protection should the market index fall.

Tempo’s products benefit from the firm’s operational strength and rigorous approach to governance, are backed by strong issuers / counterparties, and are based on a single index, with a deep end-of-term barrier.

These are the Tempo hallmarks.

We think this approach has real merits and can add real value for investors in balanced and diversified portfolios, in the current market environment.

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.

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The performance data does not take account of the commissions and costs incurred on the issue and redemption of shares. The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.

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 liquidity or counterparty over exposure.

Please ensure that you view the plan documents for full details of the features and the risks.

Tempo’s products can only be accessed with advice.

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.

TO FIND OUT MORE

To access the literature for these products:

Click here – https://bestpricefs.co.uk/tempo-structured-products/

Demand for the Tempo products is expected to be high.

We would suggest early contact if you are interested to invest in Issue 21, in order to try to ensure availability and access.

Please contact us to discuss any aspect of these products.

Best Regards.