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Innovative 10:10 proving its worth

30/01/2019 … Author:

In Late 2015 the first 10:10 plans were launched as a co-operation between Lowes and Mariana Capital. These investments drew upon Lowes’ extensive experience in the structured investment sector and took advantage of what we believe to be a pricing anomaly, whereby extending the maximum possible term of an autocall (or kick-out) product beyond the then typical six years to, in this instance, ten years, had minimal negative impact on the potential returns, whilst increasing the number of potential opportunities for positive returns to be achieved.

The 10:10 Plans were followed by the Investec/Lowes 8:8 Plans, which have a maximum possible duration of eight years and it is pleasing to note that most structured product providers have now accepted the Lowes logic, to the extent that terms beyond the traditional six year maximum are now commonplace.

We are delighted to note however, that for the first issues of the 10:10 Plans, the extended terms have not proved necessary.

In the fourth quarter of 2018 all eight options of the first three tranches matured at their first opportunity returning, on average 8.75% per annum over their three-year holding periods when the FTSE 100 Index averaged just 3.45% pa.

Whilst this is an exceptional result, it is made even better by the fact that for these investments, in recognition of Lowes input in helping to develop the 10:10 Plan, Mariana made a significant contribution to charities selected by the Lowes Charity Committee for which we are extremely grateful. All in all, the 10:10 Plans have thus far produced exceptional results for all concerned as well as a number of worthy causes.

The current issue of the 10:10 Plan introduces Goldman Sachs International as counterparty and has benefited from recent market volatility, to the extent that it offers a very attractive, potential gain of 12.28% for each year held, payable on the first anniversary, from the second year onwards where the FTSE 100 is the same, or higher than at commencement or, for the option that required the FTSE to be at least 5% higher the potential gain is 14.51% for each year held.

To arrange a free, no obligation initial consultation with a Lowes Consultant, to discuss our investment philosophy, or how our Independent financial planning service can help improve the financial security and wellbeing of you and your family please gives us a call on 0191 281 8811 or contact us here.

Investments of this nature carry risk to your capital.

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