IDAD / Goldman Sachs 4 Year Memory Income Kick Out Plan – Issue 1
The iDAD Goldman Sachs 4 Year Memory Income Kick Out Plan – Issue 1 offers a total of 12 Kick Out points. The first Kick Out point after 1 year and then every 3 months.
Contingent coupons of 1.6% will be paid every quarter (6.4% p.a.). Coupons are paid if the relevant underlying indices are at or above the coupon barrier of 80% of their strike levels.
There is a memory feature which allows missed coupon payments to be made if all the underlying Indices are above the coupon barrier at a subsequent coupon date. Product payoff is based on the worst performing index.
A summary of further details is appended below:
- A fixed annual rate of return: 6.4% p.a.
- The Plan closes on 13 November 2020 and strikes on 20 November 2020.
- If on any of the quarterly observation dates, the closing levels of ALL underlying Indices are at or above 80% of their initial levels, the income will be paid (1.6% per quarter) plus any previous missed payments.
- The Plan will kick out early if all Underlying Indices are equal to or above 98% of their initial level on any quarterly observation date starting at 12 months.
- If early maturity occurs, full capital is returned plus any income due for that quarter and the Plans will end.
- Capital Protection – 60% European Barrier (i.e. read at Final Level only)
- Counterparty – Goldman Sachs International (London) is currently rated ‘A+’ by S&P, ‘A1’ stable by Moody’s and ‘A+‘ on Fitch.
The FTSE™ 100 Index represents the performance of shares in the most valuable companies listed on the London Stock Exchange. The components are the largest companies by Market Capitalisation (which measures the value of all the shares outstanding in that company, regardless of where they’re held). The Index weights companies by size, so the largest companies in the Index have the greatest effect on its performance and most of these have strong international exposure, which means the Index is not solely representative of the UK economy.
The NASDAQ-100 Index is a modified capitalisation-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ. No security can have more than a 24% weighting. The index was developed with a base value of 125 as of February 1, 1985. Prior to December 21, 1998 the Nasdaq 100 was a cap-weighted index.
The EURO STOXX 50 Index, Europe’s leading blue-chip index for the Eurozone, provides a blue-chip representation of super-sector leaders in the region. The index covers 50 stocks from 11 Eurozone countries. The index is licensed to financial institutions to serve as an underlying for a wide range of investment products such as exchange-traded funds (ETFs), futures, options and structured products.
This Plans may be suitable for investors who:
• Are seeking the opportunity for higher income returns than current cash rates at the time this Plan is launched
• Understand how the capital at risk works and that they could lose their investment in full
• Wish to have exposure to the Underlying Indices
• Understand the Plan may mature early, returning 100% of your Initial Capital plus any income paid
• Are looking to invest for the medium term, being happy to remain invested until the Maturity Date
• Can afford to have their cash invested for the full term of the Plan
• Wish to use this investment as part of a well-diversified portfolio
• Understand the risk to capital in the event of an Issuer default and if the capital protection barrier is breached at maturity
• Should they need to sell their investment before maturity, accept that the trading price may mean they get back an amount less than they invested
• Appreciate that the fixed rate of return is conditional on the performance of the Underlying Indices
This Plan may not be suitable for investors who:
• Have not received advice, completed an appropriateness test or spoken to a financial adviser who deems the Plan appropriate for them
• Don’t understand the risks of the Plan and that capital is at risk
• Require a guaranteed income
• Don’t want exposure to equity Indices
• Require access to their investment over the term
• Are unsure how the Plan works
• Do not have at least £10,000 to invest
• Are not comfortable that their investment may be at risk if the Issuer becomes insolvent or if one of the Underlying Indices falls more than 60% from the Initial Level
For full details and terms & conditions please refer to the product brochure by clicking on the following link:
Don’t Forget the Risks
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.
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.
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.
At the Best Price FS price point (when combined with our smiley and helpful service) the iDAD plans are certainly worthy of consideration for inclusion within investment portfolios.
Simply get in touch if you wish to receive regulated advice in relation to the ‘suitability of the plans to meet your investment needs’.
Best Price FS Team