London, 15 June 2010– Morgan Stanley (NYSE:MS) today announced the reissue of four core structured products offering new and competitive payoff/reward terms catering to a wide range of investment perspectives.
Marc Chamberlain, Executive Director at Morgan Stanley, said:
“Experienced advisers know that structured products are an effective way of accessing market volatility and offsetting risk to help optimise an investment portfolio. But not everyone shares the same market outlook, or the same investment goals, and we think it’s important to cater for these different views and risk profiles with a sensible and responsible core offering.
“This is the fifth consecutive Moneyfacts five-star rating we have received for the Protected Growth Plan and we see this as good, independent confirmation that we’re offering investors well designed products.”
Morgan Stanley FTSETM Protected Growth Plan 35: 100% capital protection ***** New Moneyfacts five star rating ***** (June 2010)
The Morgan Stanley FTSETM Protected Growth Plan may suit investors with a mildly bullish view on market growth, who prefer the security of some built-in capital protection to help preserve their investment.
- “Early Exit” feature: if the FTSETM 100 Index has risen by 10% or more after three years, then investors can choose to exit the plan early and receive a fixed return of 20% plus the repayment of their initial investment (120% in total).
- If the early exit feature is not triggered, then the six year plan continues to maturity and investors will receive 100% of any growth in the FTSETM 100 Index, with no upper limit.
The plan offers 100% capital protection when held to maturity. If, at the end of the investment 2 term, the FTSETM 100 Index is unchanged or has fallen then investors will receive no growth payment and the return of 100% of their initial investment.
Morgan Stanley FTSETM Tracker Plus Plan 4: accelerated returns, decelerated losses
Accelerated growth: the plan appeals to investors with a bullish outlook, willing to put some capital at risk to achieve uncapped accelerated returns linked to the growth of the FTSETM 100 Index. The FTSETMTracker Plus 4 offers 1.25 times (125% in total) any positive performance of the FTSETM 100 Index over the six year term of the plan, with no upper limit, plus repayment of the initial investment.
Decelerated downside: the plan also offers a deceleration feature which reduces the investor’s downside exposure to one fifth of any negative performance of the index. For example, if the FTSETM 100 Index falls by 50% over the investment term (ie the final index level is lower than the initial index level), then the investor’s capital is reduced by 10%. The maximum loss would be 20% of capital and this would only happen if the index were to fall to zero.
Morgan Stanley FTSETM Kick Out Growth Plan 5: two routes to returns
The plan offers investors wishing to benefit from growth in the FTSETM 100 Index with two potential routes to returns:
- Early exit: if the FTSETM100 Index has risen by 10% after three years, then the early exit feature is triggered meaning that investors can choose to exit the plan early and receive a fixed return of 50% plus the repayment of their initial investment.
- If the early exit feature is not triggered, then the plan continues to maturity (six years) and investors receive 130% of any positive performance of the FTSETM 100 Index, with no upper limit.
There is also some protection from a falling market. At maturity investors will receive the full return of their initial investment as long as the FTSETM100 Index level does not fall 50% or more below the initial level. At maturity if the FTSETM100 Index level is 50% or more below the initial level, then investors’ initial investment will be reduced by the same amount that the index has fallen.
Morgan Stanley FTSETM Best Entry Growth Plan 5: the benefit of hindsight
Investors can access 200% of any growth in the FTSETM 100 Index over the six year investment term, up to a maximum return of 125%, benefitting from a built-in market timing feature. The plan automatically selects the lowest monthly level of the FTSETM 100 Index during the first three months of the term as the starting point for performance – the ‘best entry’ level.
At maturity, as long as the FTSETM 100 Index has not fallen by more than 50% from the ‘best entry’ level, then capital protection applies: at maturity there will be no growth payment but investors will receive their initial investment. At maturity if the FTSETM100 Index has fallen by 50% or more then there will be no growth payment and investors will lose 1% of their initial investment for every 1% that the index level is below the ‘best entry’ level.
Common to all of these products…
For all four Morgan Stanley plans, investors’ capital is used to purchase debt issued by Morgan Stanley, an S&P A rated1 institution.
All four plans have six year terms to full maturity. The deadline for investment is 28 July 2010, or 21 July 2010 for ISA transfers.
The plans are available for direct investment, SIPP / SSAS investors, Stocks and Shares ISAs, transfers of existing ISAs and discretionary investment as well as investments from charities, companies and trustees. The minimum investment for each plan is £3,000. All plans are likely to be subject to Capital Gains Tax.
Further information can be obtained by contacting Morgan Stanley on +44 (0)20 7425 9000, firstname.lastname@example.org or www.morganstanleyiq.co.uk.
1 At time of publication Morgan Stanley was A rated by Standard & Poors, A2 rated by Moody’s Investor Services limited.
| Marc Chamberlain, Executive Director|
+44 (0) 20 7425 5112
|Paul Wynne / Roddi Vaughan-Thomas / Jayne Adair|
+44 (0) 20 3178 6871 / 6870 / 8187
About the plans
|FTSE Best Entry Growth Plan 5||FSTE Kick Out Growth Plan 5||Protected Growth Plan 35||FTSE Tracker Plus Plan 4|
|Underlying||UK Equity (FTSE 100 Index)||UK Equity (FTSE 100 Index)||UK Equity (FTSE 100 Index)||UK Equity (FTSE 100 Index)|
|Investment Term||6 years||6 years||6 years||6 years|
|Capital Protection at Maturity / Early Exit||100% as long as the FTSE 100 Index at maturity is not 50% or more below its best entry level. Otherwise investors’ capital is reduced by 1% for each 1% the FTSE 100 Index has fallen.||100% as long as the FTSE 100 Index at maturity is not 50% or more below its initial level. Otherwise investors’ capital is reduced by 1% for each 1% the FTSE 100 Index has fallen.||100%||If the Index Performance is negative, investors receive the repayment of 100% of their capital less 20% of (1/5th times) the negative Index Performance. Maximum loss is 20% of capital, only achieved if the index falls to zero.|
|Securities used to provide capital protection||Securities issued by Morgan Stanley (rated A by S&P)||Securities issued by Morgan Stanley (rated A by S&P)||Securities issued by Morgan Stanley (rated A by S&P)||Securities issued by Morgan Stanley (rated A by S&P)|
|Potential Growth Return||The levels of the FTSE 100 Index are recorded monthly during the first quarter and the lowest recorded level (the ‘Best Entry’ Level) is used as the starting point for performance. |
Investors receive 200% of any growth in the FTSE 100 Index from this ‘Best Entry’ level over the investment term, up to the maximum return of 125%.
|If the FTSE 100 Index is 10% or more above the initial level after 3 years, investors can exit early and receive 50% return plus their initial investment. |
Otherwise the plan continues to maturity where investors receive 130% of any positive performance of the FTSE 100 Index over the investment term with no upper limit.
|If the FTSE 100 Index is 10% or more above its initial level after 3-years, investors can exit early and receive a fixed return of 20% plus their initial investment. |
Otherwise, the plan continues to maturity where they receive 100% of any positive performance of the FTSE 100 Index over the investment term with no upper limit.
|If the FTSE 100 Index has risen above the initial index level investors receive 125% any positive FTSETM 100 Index performance over the six year term of the plan, with no upper limit. |
Investors will also receive repayment of their initial investment.
Notes to Editors
Morgan Stanley is proud to have won the following recent awards:
“Five Star Rating”
(Morgan Stanley FTSETM Protected Growth Plan 35)
“Five Star Rating”
(Morgan Stanley FTSETM Protected Growth Plan 34)
Investment, Life & Pensions Moneyfacts (April 2010)
“Five Star Rating”
(Morgan Stanley FTSETM Protected Growth Plan 33)
Investment, Life & Pensions Moneyfacts (March 2010)
“Five Star Rating”
(Morgan Stanley FTSETM Protected Growth Plan 32)
Investment, Life & Pensions Moneyfacts (January 2010)
“Five Star Rating”
(Morgan Stanley FTSETM Protected Growth Plan 31)
Investment, Life & Pensions Moneyfacts (December 2009)
“Best in UK”
Structured Products Awards 2009
“Best Innovative Structure”
(Morgan Stanley Defensive Gilt Backed Growth Plan)
Protected Product Review Awards 2009
“Best Fully Capital Protected Product”
(Morgan Stanley Protected Growth Plan)
Protected Product Review Awards 2009
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,300 offices in 42 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.
Morgan Stanley’s dedicated structured products platform, Morgan Stanley IQ, allows them to draw on their skills and resources from the institutional business to focus on the objectives of the individual investor. Their innovative approach to delivering structured solutions involves finding the right balance between diversification and protection in volatile times, and has been recognised by the industry: Morgan Stanley IQ recently won the ‘Best in the UK’ from Structured Products Europe Awards 2009. As well as receiving recognition for their ‘gilt-backed’ product range, Morgan Stanley were merited for their ability to cope well throughout difficult market conditions, and their commitment to educating the market and media. www.morganstanleyiq.co.uk.
This text was approved by Morgan Stanley & Co. International plc (“Morgan Stanley”), authorised and regulated in the United Kingdom by the Financial Services Authority. This information does not constitute investment research and is not a product of Morgan Stanley’s Research Department and you should not regard it as a research report. This text has been prepared solely for informational purposes only and is not an offer to buy or sell any financial instrument or participate in any trading strategy. Please refer to the brochure for more information on the risks associated with this plan.