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The new terms from Tempo continue to offer the leading terms in the market for comparable products, across both of its plans and all 5 investment options. You can find a summary of each plan and links to the full details below, including details of comparable products and our analysis of the potential returns … Of course, and as always, please see the full plan literature for full details of these plans and the features, terms and conditions, including the risks. [Comparisons to other products is based on analysis of all products in the market as at 03.03.20, 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 FDEW. This was developed by FTSE Russell specifically with the aim of helping investment banks produce better terms on structured products. However, it should be noted that the FTSE 100 FDEW 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 product linked to the FTSE 100.]
The potential annual returns of each option are:
Tempo’s Long Growth Accelerator Plan (counterparty Société Générale) is the only product of its kind in the market, combining a kick-out strategy at year 5 with a defensive ‘super tracker’ at year 10, in a ‘2 in 1’ strategy plan, which offers exceptional growth potential. The potential returns of each option are:
The following section provides brief details of comparable products and our analysis of the potential returns on offer currently (as at 03.03.20):
There are currently 21 defensive and step-down kick-out products available in the market, including Tempo’s LKO1 and LKO2. Tempo’s LKO1 offers 7.10% pa, with a kick-out condition which reduces by 5% p.a. to a final step-down condition of 65%. Tempo’s LKO2 offers 8.20% pa, with a 90% kick-out condition throughout the investment term. Re comparable step-down products to LKO1, only 5 other products step down to 65% at the final year, and the average potential returns of these is just 5.72% (compared to LKO1 at 7.10%).
There are currently 11 kick-out products which require the index to be at or above the start level (or which have a higher condition, which requires the index to have risen) including Tempo’s LKO3. Tempo’s LKO3 offers 13.1%, with an at or above start level condition throughout the investment term. The average return of the 10 other products is just 10.22%. However, notably, several products have higher (i.e. worse) end of term barriers. The only other plans at or above start level product with a 60% end of term barrier is from Investec, offering 9.5%, Walker Crips, offering 10.00% & 10.15%, and Société Générale offering 10.55% (compared to LKO3 at 13.1%).
It is also worth highlighting that option 1 of Tempo’s LGA Plan offers a potential kick-out return of 64.00% at year 5, which is equivalent to 12.80% p.a. (which is more than all at or above start level condition kick-out plans available – including Tempo’s own LKO Plan!). The maximum potential return at year 10 is 120% (plus capital). And option 2 of the LGA Plan offers a potential kick-out return of 107.50% at year 5, which is equivalent to 21.50% p.a. (which is significantly more than all available kick-out plans, albeit requiring the index to have risen by 10%, over 5 years). The maximum potential return at year 10 is 180% (plus capital).
ALL of Tempo’s products are ‘deliberately defensive’, meaning that they are all designed so that they can generate some or all of their returns without requiring the market to rise, with a defined level of protection should the market 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: deliberately defensive structured products. We think this approach has real merits and can add real value for investors in balanced and diversified portfolios, in the current market environment.
https://www.bestpricefs.co.uk/tempo-structured-products/#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. 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 access the literature for these products click here:
Demand for the Tempo products is expected to be high. Issue 9 and 10 both had to close early, due to demand. So, we’d suggest early contact if you are interested to invest in issue 12, in order to try to ensure availability.Please contact us to discuss any aspect of the products. Richard and the Best Price FS Team |
