The Reyker FTSE 100 Kick Out Plan aims to return your original capital at maturity and offers potential growth of 10.30% for each year the plan runs, subject to the performance of the FTSE 100 Index.
This investment is guaranteed by Citigroup Global Markets Limited (rated A+ by S&P, A2 by Moody’s and A by Fitch). Investors should be happy with the long-term health of the guarantor and the issuer of this investment.
This investment could accumulate 10.30% growth for each annual period that it is held. This will only become a growth payment if a kick out event occurs, or if on the maturity date the FTSE 100 closes at or above 100% of its starting level.
What happens at maturity?
At maturity, this investment has a capital at risk barrier feature that will determine how much, if any, of your initial invested capital you will receive. In this case, if the FTSE 100 has fallen by more than 40% from its starting level on the maturity date, you will lose capital. This will be at least 40% of your initial invested capital and potentially all of it. This is because a barrier breach will result in you losing capital on a 1 to 1 basis equal to the percentage fall in the FTSE 100. For example, if the FTSE 100 has fallen by 70% at maturity, you will lose 70% of your initial invested capital. This barrier feature is known as a 60% European barrier and it poses a risk to your capital.
The capital at risk barrier feature gives your investment a degree of protection against a fall in the FTSE 100. However, it makes this investment riskier than, for example, a bank deposit. As such, investors will not expect the FTSE 100 to fall by more than 40% in 7 years’ time.
How can this investment be held?
Direct, Stocks & Shares ISA (new or transfer in), SIPPs/SSAS, Corporate, Charities and Trusts.
Does this plan offer FSCS Protection?
This plan offers no Financial Services Compensation Scheme protection except when Reyker holds client money pre-investment and at maturity. For more information please see the frequently asked questions section on Reykers website, or visit www.fscs.org.uk.
Other Key Information
English law governed notes
Citigroup Global Markets Limited (http://www.citigroup.com/). The product issuer is Citigroup Global Markets Funding Luxembourg S.C.A. with a guarantee by Citigroup Global Markets Limited.
The product is designed to provide a return in the form of a cash payment on termination of the product. The timing and amount of this payment will depend on the change in value of the preference shares, which in turn will depend on the performance of the underlying. The product has a fixed term and will terminate on the maturity date, unless terminated early. If, at maturity, the underlying has fallen below the barrier level, the product may return less than the product notional amount or even zero.
Early termination following an autocall: The product will terminate prior to the maturity date if, on any autocall observation date, the reference level is at or above the relevant autocall barrier level. On any such early termination, you will on the immediately following autocall payment date receive a cash payment equal to the applicable autocall payment. The relevant dates, autocall barrier levels and autocall payments are shown in the key information document.
Termination on the maturity date: If the product has not terminated early, on the maturity date, you will receive:
1. if the final reference level is at or above the barrier level, a cash payment equal to GBP 1,000.00; or
2. if the final reference level is below the barrier level, a cash payment directly linked to the performance of the underlying. The cash payment will equal (i) the product notional amount multiplied by (ii) (A) the final reference level divided by (B) the strike level.
Investors should note that the payments described above are based on the expected value of the preference shares. Therefore any return you may receive on the product depends directly on the value of the preference shares. As such, your return is only indirectly dependent on the underlying.
Under the product terms, certain dates specified above and below will be adjusted if the respective date is either not a business day or not a trading day (as applicable). Any adjustments may affect the return, if any, you receive.
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, as applicable, early. These events are specified in the product terms and principally relate to the product and the product issuer. The preference shares in turn contain provisions allowing the preference shares to be adjusted or terminated early in the case of certain exceptional events, in particular relating to the underlying. Any such adjustments or early termination are likely to affect the amount and timing of return you receive under the product, meaning the return (if any) that 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;
♦ they seek capital growth, expect the movement in the underlying 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 or guarantor 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.
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
Important Plan Dates
New investment closing date: 23 January 2019
ISA transfer closing date: 11 January 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.
Could the Reyker FTSE 100 Kick Out Plan be right for you?
If you agree with the statements below then an investment in the product may be suitable for you:
1. Type of clients: professional and professionally advised retail investors
2. Investors will expect the FTSE 100 to rise causing the investment to kick out. Investors will be seeking an investment with kick out levels that reflect this view
3. Investors will be happy to accept a capped potential return of 10.30% per annum. Investors will realise that this potential return may be worse than investing directly in the constituents of the FTSE 100
4. Investors will be willing and able to have their capital invested for 7 years
5. Investors will be able to bear a 100% capital loss in the worst case
6. Investors will have a well-diversified portfolio. This investment will be one component of this portfolio
7. Investors will be happy with the long-term health of the issuing entity and the guarantor
8. Regulated financial advisers will ensure that the investment is suitable for the investor. They will also have knowledge and experience in:
– Direct investment in structured and other capital at risk products
– Understanding what factors drive the underlying index, in this case the FTSE 100, and how movement in the underlying index impacts the value of the investment
– Understanding the benefits and consequences of the barrier feature of this investment
– Understanding Counterparty bank risk, in this case the risk that issuing entity and the guarantor default at any point during the investment term, and how this would impact any potential return from this investment
9. Investors will be willing and able to take risk. They will understand that any potential return is contingent upon the performance of the FTSE 100 on the observation dates
10. Investors will realise that it is not guaranteed that this investment will return a growth payment.