Tempo has now launched ‘Part 2’ for Issue 25 of its Long Kick-Out PlanTempo’s popular Long Kick-Out Plan reached
capacity last week, meaning they had to close the offer period early and are now
unable to accept further applications into this plan.
There is some further information below to explain why this sometimes happens.
However, Tempo have immediately arranged a ‘Part 2’ for the Long Kick-Out Plan, which is now available for the remainder of the Issue 25 offer period.
You can find a summary of the terms of Part 2 for Tempo’s Long Kick-Out Plan and links to the full details below.
Tempo’s Long Kick-Out Plan includes options with very defensive conditions for generating positive returns, as well as offering potential returns which are superior to comparable products available.
As always, please see the full plan literature for full details of the plan and the features, terms and conditions, including the risks.
While also close to capacity, Tempo’s Long Growth & Kick-Out Plan and Long Income Plan currently remain open.
Demand for Tempo’s plans has been high recently, so please contact us swiftly if investing is of interest.
> The offer period for the LKO Plan, Part 2, and LGKO Plan runs until Fri 21 Jan (unless it closes early), ahead of the start (‘strike’) date on Fri 28 Jan.
> The offer period for the LIP runs until Fri 28 Jan (unless it closes early), ahead of the start (‘strike’) date on Fri 04 Feb.
‘PART 2’: THE TEMPO LONG KICK-OUT PLAN
Tempo have been able to retain very similar terms for all of the LKO plan options for Issue 25: Part 2, which therefore remain exceptional.
All dates and features remain identical: only the potential returns have changed.
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., from the 3rd anniversary, by up to 24.5% on the 10th anniversary / end date.,
> LKO2 allows the FTSE 100 EWFD to fall by 2.5% p.a., from the 3rd anniversary, byup 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
WHY DO PLAN MANAGERS SOMETIMES NEED TO CLOSE PLANS EARLY?
As many investors in structured products will be aware, stock market dynamics (such as the level of the stock market and volatility) and other factors (such as expectations for the level of interest rates) affect structured product terms:
– a falling stock market and increasing volatility can improve structured product pricing and the terms / potential returns of certain types of product;
– conversely, a rising stock market and decreasing volatility can tighten structured product pricing and the terms / potential returns of certain types of product.
A rising stock market and decreasing volatility can also sometimes make it more challenging for plan managers to arrange further assets for their plans throughout the offer periods – which can result in early closure of offer periods.
Since the Covid-driven lows of Q1 2020, throughout 2021 and over recent weeks we have seen stock markets rising, often strongly and with lower volatility.
Most recently, the FTSE 100 EWFD has risen by c.4% since early December.
CASPA: CURRENTLY AVAILABLE STRUCTURED PRODUCTS ANALYSIS
Notably, the potential kick-out return of Tempo’s LKO1 (which offers a potential return of 6.95% p.a. and allows the FTSE 100 EWFD to fall to 75.5% 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’ index-linked products.
In fact, the potential kick-out return of Tempo’s LKO2 is higher than the potential kick-out return of most other currently available ‘atm’ single index products, many of which also have a higher end of term barrier level.
Notably, the potential kick-out return of Tempo’s LKO3 is greater than the potential kick-out return of all other currently available ‘atm’ index linked products, including dual index kick-out products.
In fact, the potential return of Tempo’s LKO3 is more than 3.5% p.a. (or more than 10.5% over 3 years and 35% over 10 years) greater than the average potential returns of other provider’s atm products.
Comparisons to other products is based on analysis of all products in the market as at 13.12.21, 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.
Please see the section below regarding the FTSE 100 EWFD.
IMPORTANT POINTS REGARDING THE FTSE 100 EWFD | TARGET MARKET
The Tempo plans link to the FTSE 100 EWFD.
The FTSE 100 EWFD was developed by FTSE Russell with the aim of helping investment banks offer improved terms on structured products for investors.
Improved terms can include: lower end of term barriers; lower conditions for generating positive returns; and higher potential returns.
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.
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.
It is important to carefully consider the current level of the FTSE 100 EWFD, the level of its fixed dividend and the outlook for its future level.
Importantly, Tempo have identified the target market for investors in Issue 25 as investors who have a positive view of the future level of the FTSE 100 EWFD, over the medium to long term.
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’.
ALL OF TEMPO’S PRODUCTS ARE ‘DELIBERATELY DEFENSIVE’
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.
THE UNIQUE TEMPO PLEDGE ‘STATED TERMS OR BETTER’ …
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 9.70% 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?!
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.
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.
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.
ONLY AVAILABLE WITH ADVICE …
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 25, Part 2 of Tempo’s Long Kick-Out Plan, or the Tempo Long Growth & Kick-Out Plan or Tempo Long Income Plan, in order to try to ensure availability and access.
Please contact us to discuss any aspect of these products.
Best Regards.
Best Price FS Team