Tempo (Issue 22) 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, and low / 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 22 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 options with very low / defensive 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 EWFD to fall by 3.5% p.a.
up to 24.5% on the 10th anniversary / end date., from the 3rd anniversary,

> LKO2 allows the FTSE 100 EWFD 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 EWFD 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 19.07.21):‘DEFENSIVE AND STEP DOWN’ KICK-OUT PRODUCTS

There are currently 7 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 5 defensive products (4 of which are linked to the FTSE 100, and 1 of which is linked to the FTSE CSDI), excluding Tempo’s LKO1 and Tempo’s LKO2,  is 5.58% p.a.  However, when comparing to Tempo’s LKO1 and LKO2 all of the other defensive products have higher end of term barrier levels and higher final step-down kick-out conditions.  Of the 5 other defensive kick-out products, all have a shorter maximum terms than Tempo’s LKO plans (the maximum term for the Tempo LKO plans is 10 years) and all also offer a first kick-out opportunity earlier than the third year anniversary.

No other defensive single index kick-out products step down as low as Tempo’s LKO1 (to 75.5%) or have lower end of term barrier levels than Tempo’s LKO plan (at 50%). Of the 5 other defensive kick-out products: 4 have an end of term barrier level set at 65% and 1 is set at 60%.Notably, the potential kick-out return of Tempo’s LKO1 (which offers a potential return of 7.0% p.a. and allows the FTSE 100 EWFD to fall to 82.5% of the start level) and LKO2 (which offers a potential return of 7.65% p.a. and allows the FTSE 100 EWFD to fall to 82.5% of the start level) are both greater than the potential kick-out return of all other currently available ‘defensive’ single index linked products. In fact, the potential returns of Tempo’s LKO1 and LKO2 are greater than the potential returns of most other provider’s ‘non-defensive’ products, highlighting the value and appeal of the Tempo product suite.

There are currently 10 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 9 other atm kick-out products (all of which are linked to the FTSE 100; excluding Tempo’s LKO3, is 6.64% p.a. Of the 9 other atm kick-out products, 8 have higher end of term barrier conditions and all have shorter maximum terms than Tempo’s LKO plan (the maximum term for the Tempo LKO plan is 10 years). All the other  products, offer a first kick-out opportunity earlier than the third year anniversary.

No other atm kick-out products have lower end of term barrier levels than Tempo’s LKO plan (at 50%). Of the 9 other atm single index kick-out products: 5 have end of term barrier levels set at 65%; 3 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 currently available index linked products, including atm index-linked kick-out products of any type, and even dual index products.  In fact, the potential return of Tempo’s LKO3 is more than 3% p.a. (or c.10% over 3 years and c.30% over 10 years) greater than the average potential returns of other provider’s atm products, highlighting the value and appeal of the Tempo product suite.

*Comparisons to other products is based on analysis of all products in the market as at 19.07.21 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 EWFD. This was developed by FTSE Russell specifically with the aim of helping investment banks provide better terms on structured products. The FTSE 100 EWFD 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 EWFD.

Tempo’s plans all come with their fabulous pledge ‘Stated terms or better‘.This unique pledge 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 EWFD.

The FTSE 100 EWFD 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 EWFD. And Tempo have agreed exclusivity to use the index in their plans with Société Générale.

However, it should be noted that the FTSE 100 EWFD 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 EWFD negatively, when the fixed dividend is higher than the level of dividends being paid by companies in the index.

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

You can find the level of the FTSE 100 EWFD by visiting the ft.com website: https://markets.ft.com/data and using the symbol ‘GPSOC002:FSI’.

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 22, in order to try to ensure availability and access.

Please contact us to discuss any aspect of these products.

Best Regards.