The Tempo (Issue 22) Long Growth & Kick-Out Plan

Question: If you think future stock market returns are difficult to predict, and you think it might be important to find investments which can turn potentially low returns from the market into viable returns in your portfolio, how can you turn future market growth of just 1% per year into a double-digit annual return … and potentially more than double your investment over 10 years (by legally binding contract / ‘alpha by contract’)?

Answer: Take a leaf out of Sir Alan Sugar’s approach and consider firing your active fund manager, many of whom may struggle to deliver alpha in a potentially low returns investment environment, and ‘hiring’ the Tempo Long Growth & Kick-Out Plan!!

Please read on for full details of this exceptional plan …

Tempo has now launched Issue 22 of its product suite.

You can find a summary of the Long Growth & 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 Long Growth & Kick-Out Plan is set at 50% (allowing a 50% fall) over the next decade: the lowest level for any capital at risk product currently available!

This ‘2 strategies in 1’ plan combines a kick-out strategy at year 5 with a defensive super tracker at year 10 offering higher potential returns than comparable kick-out products in the market!

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

Tempo’s Long Growth & Kick-Out Plan is the only product of its kind in the market, uniquely combing a kick-out strategy at year 5 with a defensive ‘super tracker’ at year 10, offering ‘2 strategies in 1 plan’ with exceptional growth potential:

This plan really is exceptional … simply put, we can’t think of any other investment fund or product which we think is more likely to deliver such strong double digit, compound returns, with a defensive risk / return profile, than this unique and innovative plan.

> The potential kick-out return of 55.50% at Y5 will be achieved if the FTSE 100 EWFD is 5% higher than the start level: equivalent to 11.1% p.a. simple.

Notably, this is more than any comparable kick-out products in the market, including Tempo’s own LKO3: albeit also noting that the LGKO kick-out return requires the index to have risen by 5% at year 5.

> The maximum growth return of 120% at Y10 will be achieved if the FTSE 100 EWFD is 10% higher than the start level: equivalent to 12% p.a. simple (and more than doubling an investment over the 10 year term).

Both strategies offer the potential for exceptional potential returns, from a market rise of just 1% per year.

Tempo’s LGKO is a great example of structured products offering ‘alpha by contract’, in a low returns investment environment, in ways which neither active nor passive funds can offer.

So,re the question: How can you turn future stock market growth of just 1% per year into a double digit annual investment return … and potentially more than double your investment over 10 years (by legally binding contract / ‘alpha by  contract’)?

Answer: Yes, take a leaf out of Sir Alan Sugar’ s book… fire your active fund manager and invest in the Tempo Long Growth & Kick-Out Plan!

This Tempo plan is unique, in combining 2 strategies in 1 plan … and we love it!

The potential return from the kick-out feature at the 5^th anniversary is better than the potential return of all comparable kick-out plans available (including Tempo’s own LKO3), and the plan also includes the defensive super tracker strategy, at the 10^th anniversary.

The following section provides brief details of other currently available products and our analysis of the potential returns on offer currently (as at 08.03.21):

There are currently 10 at the money (‘atm’) products available, which require the index to be at or above the start level, and 1 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.

> However, Tempo’s LGKO offers a potential kick-out return of 55.50% at year 5, which is equivalent to 11.10% p.a. And the plan also includes the 2^nd strategy, offering a maximum potential return at year 10 of 120% (plus capital), which is equivalent to 12% p.a.

> 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.

Tempo’s LGKO offers a higher potential kick-out return than all other FTSE 100-linked kick-out products available, including atm, >atm and dual index products, including Tempo’s LKO3, noting that the Tempo LGKO requires an >atm kick-out level of 105%.

Of the 10 other single index kick out products, including Tempo’s LKO3, 8 products have shorter maximum terms than Tempo’s LGKO plan (the maximum term for the Tempo LGKO plan is 10 years) and all offer a first kick-out opportunity earlier than the fifth-year anniversary.

Notably, while 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, the potential return of Tempo’s LGKO at year 5 is c.4.5% p.a. (or c.22.5% over 5 years) greater, and the potential return at year 10 is c.5.5% p.a. (or c.55% over 10 years) greater, highlighting the value and appeal of the Tempo product suite, including the LKO and LGKO plan.

*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 come with their unique and 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 Growth & Kick-Out Plan brochure details that the potential return is 55.50% at year 5, 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, 75%, which would be confirmed following the start date.

In Issue 12, LGA2 was ‘supposed’ to offer 107.5%, stated in the plan brochure, but this was increased to 175% (equivalent to 35% p.a.). This would nearly triple capital, i.e. £100,000 invested would mean £275,000 returned (including capital).

And if the FTSE 100 EWFD does not close at or above 110% of the start level on the 5th anniversary, the return generated on the end date was also increased from 6 times the amount by which the FTSE 100 EWFD closes above 90% of the start level, to 10 times, with the maximum potential return increased from the 180%, stated in the plan brochure, to 300% (plus capital back) at year 10 (equivalent to 30% p.a.). This would quadruple capital, i.e. £100,000 invested would mean £400,000 returned (including capital).

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 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 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.