Morgan Stanley Unveils Two "Defensive" Strategy Growth Plans

Eliane Chavagnon

15 June 2012

Morgan Stanley has launched the Morgan Stanley FTSE Defensive Bonus Plan 3 and the Morgan Stanley FTSE Defensive Digital Growth Plan 7, to provide investors with the potential for returns in “flat or moderately negative” markets over the short and medium term.

According to a statement, the Defensive Digital Growth Plan 7, a two-year product, will return 12 per cent to investors if the FTSE 100 Index has not fallen by more than 15 per cent at maturity. In this instance, although no growth return is generated, capital will be returned in full as long as the index has not dropped by over 50 per cent on the maturity date.

The six-year FTSE Defensive Bonus Plan 3 offers an “improved return” of 11.5 per cent per annum, payable on the first observation date - and on an annual basis as of year two - where the index is at or above 90 per cent of its initial level.

“Not all investors share the same opinion as to how long to maintain a defensive strategy so we are offering a defined short term and the potential for a longer investment period to accommodate these views,” said Nev Godley, vice president.

“The eurozone crisis shows no sign of abating but investors are still seeking higher returns, so we believe these plans provide a sensible strategy to achieve that aim with palatable and understandable levels of risk,” he said.

The plans close on 26 July - except for ISA transfers which close on 12 July - and strike on 16 August.