London-based Meteor Asset Management has launched its FTSE 5 Quarterly Defensive Plan 4, the returns of which are linked to a basket of five FTSE 100 shares: BHP Billiton (mining), GlaxoSmithKline (pharmaceuticals), HSBC (banking), Royal Dutch Shell Class A Shares (energy) and Tesco (consumer).

The plan, which has a maximum five-year, two-week term, will mature and pay 4.25 per cent per quarter so long as each of the five shares is at or above 85 per cent of its opening level at the first measurement date, 26 November 2012, when, if the criteria are met, the plan has the potential to provide a gross return of 12.75 per cent.

Early maturity will be triggered if on any subsequent quarterly measurement date, the closing share prices of all five shares are at least 85 per cent of their respective opening levels, in which case the plan will return 4.25 per cent of the initial investment for each quarter that the plan has been in force.

Capital is at risk at maturity if the plan has not matured early and the final level of the worst performing share is more than 50 per cent below its opening level, when the capital loss will be based on the price of the worst performing share.

“We believe that this product offers long-term equity investors the opportunity to combine the potential for attractive returns with a degree of capital protection in all but the most extreme market conditions. The defensive call level has the added benefit of allowing for returns to be paid during periods of moderate market correction,” managing director Graham Devile said in a statement.