US Wrap: S&P 500 still dominates growth products
The S&P 500 continues to dominate growth products, despite the illusion of index diversity. Morgan Stanley launched a three-year leveraged participation note ahead of the weekend which linked to three indexes: the S&P 500, the Nasdaq 100 and the MSCI Eafe International. The S&P 500 though, enjoys a 75% weighting in the basket, and the Eafe only 10%. Investors participate 110-116% in index performance with a 15% downside buffer incorporated and no upside cap.
Meanwhile, two kickout products were offered by Bank of America linked to either the S&P 500 or the iShares MSCI Eafe Index Fund. Both products pay similar coupons of between 10-14% on the product's first observation date in January if the underlying is at or above its initial level. They will be sold by Bank of America Merrill Lynch.
Issuer
Product type
Underlying(s)
Pricing date
Maturity date
Morgan Stanley
Accelerated Growth
MSCI Eafe;Nasdaq100;S&P 500
May-09
Jun-12
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