Morgan Stanley launches Defensive Income plan

Morgan Stanley has introduced a new investment to its structured product range, the FTSE Defensive Income plan.

The plan will deliver a fixed income payment of 3% after the first year regardless of the level of the FTSE 100.

Subsequent annual coupons will be paid if the index is at or above 70% of its initial level.

The coupon payments will increase in two year increments: 3% for years one and two, 4% for years three and four, and 5% for years five and six.

In addition, Morgan Stanley is reissuing three of its existing products: The FTSE Protected Growth plan 36, the FTSE Kick Out Growth plan 6 and the FTSE Best Entry Growth plan 6.

Morgan Stanley serves as the counterparty for all four plans.

Sophie Barnett, vice president, Morgan Stanley says: "As investors' portfolios have been suffering from low interest rates and depressed dividend earnings for quite some time, we took the decision to respond to the demand for income in a way that beats bank deposit accounts and also offers 100% capital protection.

"The remaining complement of products reflects the variety of participation, return and protection which continue to strike a chord with investors."

Minimum investment is £3,000 until the plans close on 27 September 2010. They are available directly or via SIPP, SSAS and ISA wrappers.

There is an early investment discount equivalent to 0.5% per annum, available from the date of investment to the plan start date on 18 October 2010.