The iDAD Callable Defensive Supertracker Plan is a 6 year plan that offers potential growth dependent on the performance of the FTSE 100 Index.
The Plan is constructed to offer a potential return of 10.00% per annum to the redemption date if the Issuer calls the investment early (please refer to the ‘Callable Feature’ below), or 3.0% for every 1.00% growth of the FTSE™ 100 Index at maturity from a defensive Strike Level. We refer to defensive, in that the Strike Level used to calculate the basis of any return if the product is not called early, is set at a level 5% below the Initial Index Level.
If the Plan is not called early, at maturity a payment will be made if the Final Level of the Index is above 95% of its Initial Index Level. In this event, the amount of the payment made will be 3.00% of your investment for each percentage point that the Final Level of the Underlying Index exceeds 95%. For example, at maturity, if the FTSE™ 100 Index had risen 10% from the Strike Level, the investor will receive 100% of their investment back plus a 30% growth payment(10% X 3.00).
Investor’s capital is protected in full unless the FTSE™ 100 Index falls more than 50%. If on the Final Observation Date the Closing Price of the Underlying Index is less than 50% of the Initial Index Level. (representing a decline of more than 50% from the Start Level), your Initial Capital will be lost at a rate of 1% for every 1% the Closing Price of the Underlying Index is below the Initial Index Level. The investment is linked to one of the best-known indices in the world (see page 5 for full details) and investors will benefit from geared growth in the Index unless, the Issuer, Goldman Sachs International (GSI) “calls” the Plan early, in which case investors will be paid a very competitive fixed rate of return. The enhanced participation is designed to more than make up for the loss of dividends a direct investor into the Index would benefit from, and although the returns are effectively capped, because the Plan is very unlikely to deliver more than the 10.00% per annum coupon rate, the cap is at an attractive level relative to current interest rates.
The Callable Feature – what is this and when may this occur?
On each quarterly Observation Date, from the second anniversary onwards, the Issuer has the option to ‘call’ the Plan at their discretion. This means the Plan will be redeemed at that point and investors will receive their Initial Capital into the Plan, together with the fixed rate of return detailed above. For example, if the Issuer called the Plan on the second anniversary,the investor would receive 100% of their Initial Capital plus a 20% return.
The callable feature provides GSI with the ability to redeem the Plan early on any Callable Observation Date, details of which can be found on page 2 of the brochure under ‘Product Information’.
The main reason this may happen is because GSI believes the enhanced growth participation that could be paid out at maturity, may be higher than the coupons that have accumulated so far. It works in a very similar way to having a cap on the maximumpay-out.
For example, if after 4 years the Index has grown by 20% and seems set to continue growing, the Issuer may feel that they will be better off redeeming the Plan and paying 4 years of the fixed annual return, rather than potentially paying the Index related return once the Plan matures.
Although this feature allows the Issuer to avoid paying very high returns, the fixed annual return is set at a rate that is attractive
How can I hold this?
Direct, ISA/ISA Transfers, SIPPs, SSAS,Companies, Charities and Trusts
Other Key Information
The product is in the form of a note issued under English law. It is not an interest bearing security. The payment obligations of the product manufacturer are not guaranteed by any entity.
Goldman Sachs International Bank, London, UK (see http://www.gspriips.eu or call +442070510101 for more information)
The product provides the potential for capital growth and does not pay interest. What you will receive at the end of the term of the product is not certain and will depend on the performance of the FTSE 100 Index (the underlying asset). The term of the product will end no later than June 19, 2025. However, we have the right to terminate the product early. Each note has a face value of GBP 1,000. The issue price is 100.00% of the face value. The product will be listed on the Luxembourg Stock Exchange (Main Segment).
Call feature: We have the right to terminate the product early on each call payment date upon 5 days notice, being each call date shown below. In this case you will receive the call payment amount shown below for each note that you hold.
Repayment at maturity:
This section applies only if we do not terminate the product early as described above.
On June 19, 2025, for each note that you hold:
1. If the closing price of the underlying asset on June 12, 2025 is at least equal to 95% of the initial reference price, you will receive the difference between (i) GBP 3,000.00 (i.e., 300.00% of the product notional amount) multiplied by (A) the closing price of the underlying asset on June 12, 2025 divided by (B) the initial reference price of the underlying asset and (ii) GBP 1,850.00;
2. If the closing price of the underlying asset on June 12, 2025 is below 95% of the initial reference price but at least equal to 50% of the initial reference price, you will receive GBP 1,000.00;
3. Otherwise, you will receive GBP 1,000.00 multiplied by (i) the closing price of the underlying asset on June 12, 2025 divided by (ii) the initial reference price of the underlying asset.
The initial reference price of the underlying asset is the closing price on June 12, 2019.
The product terms also provide that if certain exceptional events occur (1) adjustments may be made to the product and/or (2) the product issuer may terminate the product early. These events are specified in the product terms and principally relate to the underlying asset, the product and the product manufacturer. The return (if any) you receive on such early termination is likely to be different from the scenarios described above and may be less than the amount you invested.
The product is intended to be offered to retail investors who fulfil all of the criteria below:
♦ they have the ability to make an informed investment decision through sufficient knowledge and understanding of the product and its specific risks and rewards, with experience of investing in and/or holding a number of similar products providing a similar market exposure, either independently or through professional advice;
♦ seek capital growth, expect the movement in the underlying asset to perform in a way that generates a favourable return, have an investment horizon of the recommended holding period specified in the key information document and understand that the product may terminate early;
♦ they accept the risk that the issuer could fail to pay or perform its obligations under the product and they are able to bear a total loss of their investment; and
♦ they are willing to accept a level of risk to achieve potential returns that is consistent with the summary risk indicator shown in the Key Information document.
The product is not intended to be offered to retail clients who do not fulfil these criteria. Please ensure you have read and understood the important documents contained on this page before investing.
To gain a full understanding of this Plan it is important that you read the brochure carefully, including the product risks and terms and conditions. If you are unsure about any aspect of this investment product, please seek financial advice to ensure the Plan suits your requirements and overall investment planning.
Moneyworld does not offer investment advice. The information in this brochure does not constitute tax, legal or investment advice. Please read our terms and conditions before investing
Our fee is just 0.5%. This can be deducted from the investment or paid by enclosing a cheque to Moneyworld.
Important Plan Dates
Closing Date (Cheque payments): 29 May 2019
Closing Date (Electronic payments): 05 June 2019
ISA Transfer closing date: 22 May 2019
> Appropriateness Questionnaire
(Please complete and return with your application form)
How do I invest?
Please print and complete your application form together with our appropriateness questionnaire. Please send your completed forms to us at Moneyworld, 34 High Street, High Wycombe, Bucks, HP11 2AG.
Is the iDAD Callable Defensive Supertracker Plan right for me?
This Plan may be suitable for investors who:
♦ Are seeking the opportunity for higher returns than current cash rates at the time this Plan is launched
♦ Understand how the capital at risk works and that they could lose their investment in full
♦ Wish to have exposure to the Underlying Index
♦ Understand the Issuer may call the Plan early, returning 100% of your Initial Capital plus a return equivalent to 10.00% per annum
♦ Are looking to invest for the medium to long term, being happy to remain invested until the Maturity Date
♦ Can afford to have their cash invested for the full term of the Plan
♦ Wish to use this investment as part of a well-diversified portfolio
♦ Understand the risk to capital in the event of an Issuer default and if the capital protection barrier is breached at maturity
♦ Should they need to sell their investment before maturity, accept that the trading price may mean they get back an amount less than they invested
♦ Appreciate that the fixed rate of return is conditional on Goldman Sachs International calling the investment
This Plan may not be suitable for investors who:
♦ Have not received advice, completed an appropriateness test or spoken to a financial adviser who deems the Plan appropriate for them
♦ Don’t understand the risks of the Plan and that capital is at risk
♦ Require a guaranteed income
♦ Don’t want exposure to an equity Index
♦ Require access to their investment over the term
♦ Are unsure how the Plan works
♦ Do not have at least £10,000 to invest
♦ Are not comfortable that their investment may be at risk if the Issuer becomes insolvent or if the Underlying Index falls more than 50% from the Initial Index Levels
♦ Cannot make an informed decision based on the information within the brochure or from the Issuer’s Key Investment Document (KID)