Morgan Stanley has launched a six-year structured product aiming to provide investors with an income of up to 7% per annum.
The Morgan Stanley FTSE Income Accumulator plan will make income payments every three months as long as the FTSE 100 stays within a prescribed range of within 4500 to 9000 index points.
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The level of quarterly income will be determined by taking weekly observations of the closing level of the FTSE 100 index during the quarter, to a maximum of 1.75% per quarter.
But if the index closes outside the range on every weekly observation, then no income payment will be made for that quarter.
At maturity, as long as the FTSE 100 index is at or more than 4000 points, investors will receive the repayment of their initial investment in full.
If the FTSE is less than 4000 points then capital will be at risk and the repayment of the initial investment will be reduced by the amount the FTSE 100 index has fallen from the plan start date to the plan end date.
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By GlobalDataThe product is open for investment until 27 August 2013, with the deadline for Isa transfers set for 19 August 2013. The minimum investment is £3,000.
Nev Godley, vice president of Morgan Stanley, said: "With interest rates remaining low for the foreseeable future, many investors are still searching for income-generating investments.
"This plan might appeal to income investors who don’t have a firm view on whether the market will go up or down from the current level," Godley added.
