Morgan Stanley’s hybrid tracks eurozone returns

Morgan Stanley’s hybrid tracks eurozone equities and inflation and offers a fixed coupon in some years of the investment regardless of underlying performance. In return, investors may have to give up some capital if the equity component falls

This is a four-year product linked to the performance of the Eurostoxx 50 Index and the Eurostat Eurozone HICP Ex Tobacco unrevised series, a measure of eurozone inflation. The product pays fixed coupons of 5% for the first and fourth years, while the coupon in the second and third years depends on the year-on-year change in the inflation measure. Capital is at risk if the final level of the Eurostoxx 50 is 50% or more below its starting level.

The coupon in the second and third years will be