Tempo Issue 36 now open: Details for the Long Growth & Kick-Out Plan

FT columnist David Stevenson’s pick for his ISA investment last year (see below)!

Tempo has unveiled Issue 36 of its product suite this week, which continues to offer exceptional terms for investors, including plan options with high potential returns and/or deeply defensive conditions for generating positive returns. The Issue 36 terms continue to benefit from recent stock market volatility, which can improve the terms of capital at risk structured products. One change to flag/note is that Tempo has lowered the end of term barrier level for all of the plans/plan options from 60% (allowing a 40% fall) to 55% (allowing a 45% fall). Demand for Tempo’s plans is usually high – so please contact us swiftly if investing is of interest (plans can close early, particularly in the current environment).

The Tempo Long Growth & Kick-Out Plan

This email provides details of Tempo’s Long Growth & Kick-Out Plan. Tempo’s Long Growth & Kick-Out Plan offers ‘2 strategies in 1 plan’, combining a kick-out strategy at year 5 with a defensive super tracker at year 10. The potential returns are higher than comparable kick-out products in the market! Writing for Citywire recently, FT columnist David Stevenson highlighted this plan as his choice for his own ISA last year – also highlighting Best Price services for investors: http://citywire.com/funds-insider/news/david-stevenson-chaotic-markets-mean-jumping-returns-for-this-contentious-strategy/a2383174. As always, please see the full plan literature for full details of the plan and the features, terms and conditions, including the risks.

More About The Tempo Long Growth & Kick-Out Plan

Tempo’s Long Growth & Kick-Out Plan is the only product of its kind in the market, uniquely combing a kick-out strategy at year 5 with a defensive ‘super tracker’ at year 10, offering ‘2 strategies in 1 plan’ with exceptional growth potential. This plan really is exceptional … simply put, we can’t think of any other investment fund or product which we think is more likely to deliver such strong double digit, compound returns, with a defensive risk/return profile, than this unique and innovative plan.

• The potential kick-out return of 72.50% at Y5 will be achieved if the FTSE 100 EWFD is 5% higher than the start level, equivalent to 14.50% p.a. simple.
• The maximum growth return of 120% at Y10 will be achieved if the FTSE 100 EWFD is 10% higher than the start level, equivalent to 12% p.a. simple (and more than doubling an investment over the 10-year term).

Both strategies offer the potential for exceptional potential returns, from a market rise of just 1% per year. Tempo’s LGKO is a great example of structured products offering ‘alpha by contract’, in a low returns investment environment, in ways neither active nor passive funds offer.

Important Points Regarding The FTSE 100 EWFD | Target Market

The Tempo plans link to the FTSE 100 EWFD. The FTSE 100 EWFD was developed by FTSE Russell with the aim of helping investment banks offer improved terms on structured products for investors. Improved terms can include lower end of term barriers, lower conditions for generating positive returns, and higher potential returns. Société Générale have an exclusive license with FTSE Russell to use the FTSE 100 EWFD. And Tempo have agreed exclusivity to use the index in their plans with Société Générale.

It should be noted that the FTSE 100 EWFD will perform differently to the FTSE 100, due to the equal weighting and fixed dividend. This means that the returns from plans linked to it might be higher or lower than the returns from a similar product linked to the FTSE 100. Neither equally weighted nor market capitalisation weighted indexes are better or worse than the other. Each offers a different approach and has different merits: risks and returns will be different for each and will depend on the future stock market environment and the performance of the companies in each index. While the fixed dividend can help provide higher potential returns or lower risks for structured products, it can affect the level of the FTSE 100 EWFD negatively, when the fixed dividend is higher than the level of dividends being paid by companies in the index. It is important to carefully consider the current level of the FTSE 100 EWFD, the level of its fixed dividend and the outlook for its future level. Importantly, Tempo have identified the target market for investors in Issue 36 as investors who have a positive view of the future level of the FTSE 100 EWFD, over the medium to long term. Information about the FTSE 100 EWFD can be found in the plan brochures. You can find the level of the FTSE 100 EWFD by visiting the ft.com website: https://markets.ft.com/data and using the symbol ‘GPSOC002:FSI’.

All of Tempo’s Products Are ‘Deliberately Defensive’

Tempo’s products are described as ‘deliberately defensive’, meaning that they are all designed so that they can generate some or all of their returns without requiring the market index which they are linked to, to rise, with a defined level of protection should the market index fall. Tempo’s products benefit from the firm’s operational strength and rigorous approach to governance, are backed by strong issuers/counterparties, and are based on a single index, with a deep end-of-term barrier. These are the Tempo hallmarks. We think this approach has real merits and can add real value for investors in balanced and diversified portfolios, in the current market environment.

The Unique Tempo Pledge ‘Stated Terms or Better’

Tempo’s plans come with their unique and fabulous pledge: ‘Stated terms or better’. This unique pledge allows Tempo to increase the terms of a plan above those stated in brochures, if the stock market and other factors during an offer period mean that they can do so. For example, while the Long Growth & Kick-Out Plan brochure details that the potential return is 72.50% at year 5, if stock market movement and other factors mean that Tempo can increase this further during the offer period, the actual terms may be increased, which would be confirmed following the start date. In Issue 12, LGA2 was ‘supposed’ to offer 107.50%, stated in the plan brochure, but this was increased to 175.00% (equivalent to 35% p.a.). This would nearly triple capital, i.e. £100,000 invested would mean £275,000 returned (including capital). And if the FTSE 100 EWFD does not close at or above 110% of the start level on the 5th anniversary, the return generated on the end date was also increased from 6 times the amount by which the FTSE 100 EWFD closes above 90% of the start level, to 10 times, with the maximum potential return increased from the 180%, stated in the plan brochure, to 300% (plus capital back) at year 10 (equivalent to 30.0% p.a.). This would quadruple capital, i.e. £100,000 invested would mean £400,000 returned (including capital). What’s not to love about this great feature, which only Tempo offers?!

Don’t Forget the Risks

As with all forms of investment there are risks involved. Structured products are not suitable for everyone: in addition to understanding the features and benefits investors also need to understand the risks and limitations:

• Structured products present counterparty risk, which needs to be understood and accepted: the potential returns of a structured product and the repayment of money invested usually depend on the financial stability of the issuer and counterparty throughout the investment term
• The level of return a structured product generates may be capped and/or less than the level of return generated by direct investment in the stock market or via active or passive funds
• The terms of structured products can predefine what can be expected at maturity and at certain other dates, such as potential ‘kick-out’ and early maturity dates: but these terms do not apply during the investment term
• The value of structured products during the investment term may be affected by various factors: while accessing an investment is usually possible, during normal market conditions, this is not guaranteed
• Past performance is not a reliable indicator of or guide to future performance and should not be relied upon, particularly in isolation: the value of investments and the income from them can go down as well as up capital is at risk and investors could lose some or all of their capital

Please ensure that you view the plan documents for full details…